While most of Meta's competition in social media is experiencing similar headwinds, it shouldn't be lost that there's an impact from advertisers having more choices in the space. Long term, investors should expect the growth of Reels to become additive to overall user monetization, but there's an adjustment period, just as we saw with the growth of Stories. As a result, average ad prices and revenue per minute of engagement declined. While management says Reels is additive in time spent, it's still somewhat cannibalistic of those other formats. That's notable because Reels still monetizes at lower rates than Feed and Stories in Instagram and Facebook. Management said Reels accounts for 20% of time spent on Instagram during the first quarter, and engagement with the format across Facebook and Instagram increased 30% in the second quarter. One big area of investment for Meta is its Reels format, which it features on both Instagram and Facebook. While it remains a challenge for Meta, which is working on artificial intelligence (AI) to improve ad measurement, the impact on revenue growth will be neutral going forward.
![popcorn time ios 14 popcorn time ios 14](https://ioshacker.com/wp-content/uploads/2020/03/Popcorn-Time-Nac.png)
The good news for investors is that Meta (and the rest of the industry) will mostly lap the impact of iOS 14 in the third quarter. That's impacting their willingness to pay, and pushing them to seek platforms with more measurable advertising. Without that data, advertisers are less sure how valuable Facebook and Instagram ads are. It let advertisers know how well their ads converted into sales. The ability to track users who saw an ad on Facebook or Instagram and then made a purchase at a store's website or mobile app was key for Meta.
![popcorn time ios 14 popcorn time ios 14](https://c1.lestechnophiles.com/images.frandroid.com/wp-content/uploads/2016/02/popcorn-time_20160218_110928.jpg)
Apple iOS changesĪpple ( AAPL -0.14%) made changes in iOS 14, released last fall, that required apps to ask for permission to track users' data across other apps. But Meta has greater exposure to foreign markets than many of its peers, which means foreign-exchange rates will play a bigger factor in its results. "Foreign currency will be an approximately 6% headwind to year-over-year total revenue growth in the third quarter, based on current exchange rates," management shared in the earnings release.Īgain, this is an industrywide issue. As a result, management said revenue growth would have been 3% on an foreign exchange neutral basis, versus the 1% decline it experienced.Įxchange rates will continue to weigh on third-quarter results. Meta generates a significant portion of its revenue - over 54% last quarter - from countries outside of the United States. The dollar strengthened against foreign currencies during the first half of 2022. But the impact is being seen throughout the industry, so it doesn't indicate a weakness from Meta itself. It's unclear when the economy will turn around and advertising demand will improve. That's reflected in both the second-quarter results and management's outlook for the third quarter. It's a lot harder to justify ad spend for a lot of businesses in this environment. gross domestic product (GDP) has now fallen for two consecutive quarters. Supply chain bottlenecks have left many store shelves empty. Rising inflation has affected food, gasoline, and other essentials and has left many households with less money to spend for discretionary purchases. We're in the midst of global economic uncertainty. Here are five big ones for investors to know. Some will stick around for awhile others will dissipate quickly.
![popcorn time ios 14 popcorn time ios 14](https://www.macxdvd.com/mac-dvd-video-converter-how-to/howto_image/ipad-popcorntime.jpg)
There are a lot of factors negatively impacting Meta's revenue right now. The results were foreshadowed by weak results from its peers in social media, and analysts expected revenue to come in roughly flat, compared to the year-ago period. It wasn't all too surprising when Meta Platforms ( META -2.03%) reported a year-over-year decline in revenue in the second quarter.