Following a “12 months of efficiency” in 2023, Meta has made artificial intelligence (AI) its top theme for 2024, investing aggressively in technology that touches every facet of its business, from users and creators to businesses and developers, CEO Mark Zuckerberg stated on the corporate’s recent earnings call.
AI — especially the generative kind — already fueled a 24% year-over-year increase in Meta’s ad business in Q4 for a complete of $38.7 billion. Executives from Meta delved further into its plans for AI, explained what advertisers and agencies can expect from the tech this 12 months and shared several success stories during a virtual roundtable on Feb. 7.
“2023 was a transparent inflection point for us, and our Q4 earnings showed that Meta is admittedly making it count for advertisers that use our tools,” said Alvin Bowles, vp of Meta’s global business group. “Our investments in AI are paying off for each advertiser performance and for our community with a more relevant discovery engine greater than ever before.”
Along with growing ad revenue, Meta saw increases in users and watch time within the last quarter, with each day watch time across all video types growing over 25% year-over-year and users resharing Reels 3.5 billion times per day. Meta attributes the engagement growth to investments in AI and its discovery engine which were at the guts of its businesses for years and are now paying off.
“We are absolutely in the midst of our AI journey, not the start.”
Alvin Bowles
Vice president, global business group, Meta
“We are absolutely in the midst of our AI journey, not the start. This is just not a recent thing for Meta; it is a cornerstone of what we do,” Bowles said. “AI definitely improved the performance of our ad system and is behind personalized content that folks see in all of our apps… AI is a fundamental a part of the experiences we offer to each people and businesses.”
Similarly, multiyear investments in machine learning, automation and AI that Meta made in its ad products to handle changes within the digital ad industry are driving successes for advertisers. But those investments won’t have paid off in full if the corporate was not in a position to soak up feedback from a whole lot of tens of millions of users — a advantage of Meta’s massive global scale.
“The feedback is a giant a part of how we improved our AI systems so quickly, especially in Reels and ads, where we needed to re-architect around recent rules,” Bowles explained. “What you are seeing now’s a results of those strategic decisions we made during the last variety of years, and now nearly all of our advertisers are already using AI tools to assist create and goal their ads.”
An AI-powered holiday season
Much of the AI and automation work in ads has enhanced Meta’s Advantage suite of tools, including the Advantage+ Shopping solution that functions as an “easy button” that may automate campaign creation, as many advertisers did during last 12 months’s “AI-powered holiday season,” per Bowles.
For example, Felicity, a small business specializing in jewelry around consumers’ passions, leaned heavily into the Advantage suite through the Cyber Five period of Thanksgiving through Cyber Monday and saw a 24% increase in revenue and a 20% boost in customer return rate versus the identical period in 2020. Meanwhile, Swiss sportswear brand On tested Meta’s Advantage+ Catalog ads and product-level video solution en path to a 41% increase in return-on-ad-spend and a forty five% decrease in cost-per-purchase in comparison with business as usual campaigns.
Meta has also began rolling out generative AI features including text variation and image expansion across its ad suite, and plans to broaden the provision of background image generation later this quarter.
During Cyber Five, cosmetic brand Fresh used Advantage+ Shopping Campaigns and the generative ad text variation feature to diversify ads and optimize for performance, driving a 5-times higher return on ad spend and a 42% jump in purchases in comparison with business-as-usual campaigns. Likewise, J.C. Penney used Messenger and Instagram to bridge the digital-physical divide with a custom gift bot that drove nearly 4X higher conversion rates throughout the holiday period.
“These are all extraordinary experiences, and you may see from the examples of small and enormous businesses, we’re really specializing in businesses of all sizes,” Bowles said. “Building AI driven services and products that connect individuals with businesses that they care about and help businesses grow will remain a top goal for us as an organization.”
Supercharging spend
Direct-to-consumer cosmetics brand Jones Road Beauty has been an early test-and-learn partner of Meta’s AI tools and Advantage+ Shopping Campaigns solution. During the roundtable, CMO Cody Plofker spoke highly of how Meta’s tools helped the brand navigate a Q4 that had initially been marked with caution over concerns in regards to the consumer spending environment.
“I like [Advantage+] because we will really just give attention to creative, we will really give attention to overall strategy and concepting, but not necessarily should be spending an excessive amount of time within the platform media buying,” the chief said. “Shop ads… has been one other really cool thing to have in the combination… It’s been one other great approach to reach recent people.”
Plofker and Jones Road Beauty work with Meta to construct the ad and artistic strategies to satisfy its evolving business goals, leaning into Meta’s expertise around its own tools to test-and-learn recent tactics. Along with investing in shop ads, the brand is running bid-cap campaigns and testing recent bid strategies to spice up return-on-ad-spend which have made it more confident in increasing its level of spend on the platform.
“During Black Friday, we spent some record days, amounts that we needed to call AmEx and ask for a line of credit since the performance was there. But I would not necessarily have been comfortable spending such a high figure if performance wasn’t there,” Plofker explained. “The incontrovertible fact that I used to be confident enough, and since I knew that we might only spend that quantity If Meta was confident that the performance could be there, that is been a extremely big thing that is allowed us to profit from our budget and spend it at probably the most appropriate times for us.”
What to expect in 2024
Meta used the roundtable to put out suggestions for agencies and advertisers around AI and beyond. Per Goksu Nebol-Perlman, Meta’s vp of product marketing, ads & business products, these include:
- Accelerate investments in creative velocity to understand performance gains
- Curation is an important skill on this recent era of generative AI
- It’s crucial to share more brand insights with AI models to generate creative that higher reflects a brand’s identity, voice and magnificence
- It’s time to start putting headcount against generative AI roles inside marketing organizations
Generative AI could also help advertisers navigate signal loss they’ll face as Google continues deprecating third-party cookies and the ad industry shifts from interest-based to probabilistic targeting by improving campaign insights.
“Gen AI provides a possibility for us to repeatedly iterate with the insights,” Nebol-Perlman said. “The more you are in a position to create variations of the whole lot and the faster the testing, the more the insights. That’s where we’re very much leading: using gen AI as a possibility to offer more insights to businesses for them to repeatedly test and learn, and by doing that, they’ll run higher campaigns that find higher results.”
Between ongoing signal loss and robust overall interest in AI, advertisers are taking motion and leveraging the capabilities that Meta has been investing in for years. Users of those capabilities have seen how additive they could be to the promoting workflow, Bowles said.
“The more those who are using it, the more they’re finding success,” the chief said. “They’re finding time being put back into their coffers to give attention to the things that are really germane to those creative briefs.”
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