In the first half of 2024, each Meta employee accounted for more than $1 million in revenue, marking a company record. This achievement is all the more impressive considering the steep cuts made by the company in late 2022 and early 2023.
The credit for this success largely goes to AI-driven improvements to Meta’s recommendation system and ads platform. These advancements have enabled the social media giant to overcome challenges posed by Apple’s app-tracking policies changes in 2021, which initially threatened to impact Meta’s business growth.
Despite experimenting with new ventures like subscriptions and virtual reality hardware, advertising remains the backbone of Meta’s business. In Q2 of this year, advertising made up a whopping 98% of Meta’s revenues.
Advantages+ AI tools boost ad business
Meta responded to Apple’s privacy changes by developing a suite of new AI-driven ad tools called Advantage+. Today, almost all of Meta’s millions of advertising clients use at least one of these products. The Advantage+ AI tools help advertisers choose targets and optimize placement more easily and efficiently.
A Meta-commissioned study found that one dollar of investment per advertiser will now generate $3.71 in return, a 12% increase since 2022.
Benefits beyond advertising
AI-driven content recommendations are also increasing user engagement with Meta’s products, resulting in more ad inventory. Ad impressions across Meta’s family of apps (Facebook, Instagram, Messenger, WhatsApp, and Threads) increased by 10% year-over-year during Q2 2024.
The future of AI at Meta
Meta is now investing heavily in developing genAI products that will enable advertisers to create and test multiple iterations of ads’ creative content. CEO Mark Zuckerberg envisions a future where advertisers can simply set a business objective and budget, leaving the rest to Meta’s AI-powered advertising platform.
In the end, Meta’s success in 2024 can be attributed to its ability to leverage AI-driven innovations to overcome challenges and boost its ad business. As the company continues to invest in AI research and development, it is poised to maintain its position as a leader in the digital advertising space.
Featured image credit: Mariia Shalabaieva/Unsplash
