AdExchanger’s James Hercher covered the heck out of news earlier this week of yet another bug plaguing Meta’s ad platform.
This one involved Meta ignoring cost-capping controls, which caused advertisers to overspend on inventory across Facebook and the Meta Audience Network during the early hours of Sunday morning.
But that wasn’t the only Meta news this week. The company also reported Q1 earnings and beat Wall Street’s estimates, with total revenue for the quarter up 3% to $28.6 billion.
Wait, though, isn’t Meta supposed to still be reeling from Apple’s privacy changes? The nature of addressable advertising on Meta’s platforms was completely upended when Apple released its AppTrackingTransparency framework in 2021.
As Eric Seufert points out at Mobile Dev Memo, behavioral targeting on Meta has been “permanently and systematically degraded by ATT,” not to mention other privacy restrictions via regulations, including GDPR and the EU’s Digital Markets Act.
Yet, Mark Zuckerberg specifically highlighted on the company’s Q1 call that Meta’s ad monetization efficiency was up by more than 30% on Instagram and over 40% on Facebook quarter over quarter.
So, what gives?
Under construction
Meta has been investing like crazy in artificial intelligence, automation tools and privacy-enhancing technologies (PETs).
Machine learning and automation are the beating heart of Meta’s strategy for lapping (to use a term finance people love) the effects of ATT and signal loss more generally.
Meta is pouring money, time and effort into improvements to its ad ranking and measurement, primarily by infusing AI into products like Advantage+.
Zuck told investors the daily revenue from Advantage+ Shopping campaigns is up by 7x over the past six months.
And Susan Li, Meta’s CFO, said that although Instagram Reels, the short-form TikTok clone (well, she didn’t call it a “TikTok clone,” but we all know that it is), doesn’t monetize as efficiently as others formats, it could be “revenue neutral” by the end of this year.
Meta executives also ballyhooed the company’s popular messaging apps as a moat against signal loss (both current and to come).
Li even referred to messaging as a big part of Meta’s “first-party data playbook.”
Regulators are ready
Good for Meta. But regulatory actions continue to pile up at Meta’s feet.
For example, there’s drama to come on the transatlantic data transfer front.
In mid-2020, the European Union invalidated Privacy Shield, a legal framework for exchanging personal data for commercial purposes between the EU and the US. (When does Max Schrems even sleep, by the way?)