Meta has crossed the $1 billion annual revenue run rate for ads on its TikTok rival short-video making platform Reels, and Reels now has a higher revenue run rate than Facebook/Instagram Stories at identical times post-launch, its Founder and CEO Mark Zuckerberg has revealed.
Zuckerberg said that in the April-June period (Q2), “we saw a more than 30 percent increase in the time that people spent engaging with Reels across Facebook and Instagram”.
Meta had announced during its Q1 earnings call that Reels made up more than 20 percent of the time on its platform.
“Our work on ads monetization efficiency for Reels is actually making faster progress than we’d expected. The bottom line is I think we’re on track here and we just need to push through this one,” he told analysts during the company’s quarterly earnings call late on Wednesday.
The company saw a 15 percent increase in watch time in the Reels video player on Facebook alone.
“In Instagram, we see that Reels makes up more than half of content reshared into messages,” Zuckerberg said.
He said that the near-term challenge is the growth of short-form video.
“Reels doesn’t yet monetize at the same rate as Feed or Stories. So in the near term, the faster that Reels grows, the more revenue that actually displaces from higher monetizing surfaces,” the Meta CEO added.
Meta launched ads and Reels last year and it is growing quickly “we see it as an area where there is significant potential for growth in the future,” said outgoing COO Sheryl Sandberg.
“Our focus right now with Reels is ramping up ad load, improving performance, and making sure the ads are easy for advertisers to create,” she noted.
The company is also using AI to better understand the content being published in Reels, so “users can connect to the content that is most relevant to them and marketers can also show more relevant ads”.