Meta shared updated information on engagement on its platforms on its Quarterly earnings for the first quarter of 2023 call on Wednesday, with Meta’s chief financial officer Susan Li joining CEO and founder Mark Zuckerberg to answer questions from analysts about its results. Zuckerberg shared that time spent on Instagram has grown more than 24% since the company launched Reels on the platform thanks to AI-powered content recommendations — aka, the kind of recommended offline videos TikTok basically built its entirety on. your brand.
“We’re very pleased with what we’ve seen Reels drive in terms of incremental engagement on the platform so far,” Li said later in response to an analyst’s question, adding that “it’s clear that people value the short-term video” on the platform. She further clarified that Instagram is also seeing a lot more sharing around Reels in recent months.
“We are seeing the share momentum take off with Reels reshares, with reshares doubling in the last six months,” he said.
Li seemed to shy away from an analyst’s question about whether Reels was having a similar impact on Facebook proper, but repeatedly noted that on FB, AI-powered recommendations that don’t come from direct connections are increasing engagement among users.
While Reels and AI recommendations are driving more engagement on Instagram, that still doesn’t directly translate to more revenue. In fact, Li acknowledged that Reels is actually cannibalizing some revenue from Stories and feed-based posts, as they represent part of the time users would have spent engaging with that content. However, the biggest trend is incremental, which means total user time is increasing, which Li says will eventually be a positive point for revenue potential. She said Reels is on track to be revenue neutral by the end of the year or early 2024, and she expected positive contributions sometime after that. She noted that there will be product work to figure out proper monetization for Reels, as they are “structurally different” from existing Instagram content types.
“We don’t have a line of sight for getting Reels to monetization parity with feed or Stories per time because of those structural differences,” but because it’s driving incremental growth, he said they’re confident they’ll eventually become a key contributor to monetization. .
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