Meta doubled its advertising revenue through the use of artificial intelligence

  • The Impact of AI on Advertising. The use of artificial intelligence has significantly increased revenues from advertising campaigns, more than doubling revenue from the previous year.
  • Revenue Growth and User Base. Meta's total revenue grew by 27%, reaching $36.5 billion, with advertising making the main contribution, and the number of users increased by 7%.
  • Forecasts and Challenges. Despite successes, Meta expects revenue declines in the next quarter.

Artificial intelligence continues to stimulate growth at #Meta, which has been ongoing for a year. Revenue from advertising campaigns for Advantage+ Shopping (ACS) more than doubled compared to last year, stated Meta CEO Mark Zuckerberg during the earnings call for the first quarter of 2024.

Financial Results

Meta, the parent company of Instagram and Facebook, reported a 27% increase in revenues, reaching $36.5 billion compared to $28.6 billion in 2023. Advertising accounted for 97% of this revenue, or $35.6 billion, with the average ad price rising by 6%.

Analyst Comment

"Despite recent criticism of its effectiveness, Meta's advertising business runs like clockwork," says EMARKETER senior analyst Max Willens. "With such an inventory and average CPM, Meta is returning to super profits, wisely investing them in opportunities that may only pay off years down the line."

Innovations and Investments in AI

Meta's focus on integrating AI into its products has yielded strong financial results for the second quarter in a row. Last week, the company introduced its Meta AI assistant based on Llama 3, with plans to deploy the chatbot in multiple languages and countries in the coming months.

A Good Year

"This has been a good year," Zuckerberg said, highlighting the company's efforts in AI, including "healthy growth across our apps."

Thanks to significant investments in AI infrastructure, including data centers and chips, Meta stated that expected capital expenditures for 2024 are between $35 and $40 billion, previously forecasted at $30-37 billion.

The number of users across Meta's apps grew by 7% year-over-year, averaging 3.24 billion users in the Facebook, Instagram, WhatsApp, and Messenger app ecosystem.

However, not all news was good. The tech giant expects revenue declines for the second quarter in the range of $36.5 to $39 billion, below analysts' expectations of $38.3 billion according to a FactSet survey.

For Publishers

Pay attention to the growing influence of AI on advertising technologies. More actively integrate such tools to increase advertising revenue.

Forecast

Given Meta's focus on AI and innovations in advertising, the market is expected to continue evolving towards more personalized and automated advertising solutions based on AI. This could lead to new standards in the advertising industry, especially in terms of pricing and targeting.

Further Reading