Facebook parent Meta Platforms is doubling down on short-form video, artificial intelligence (AI) performance in social media feeds and putting new metaverse hardware IRL.
On its Q1 2022 earnings call Wednesday (April 27), Meta CEO Mark Zuckerberg talked up the forthcoming Horizon metaverse and Meta Quest 2 augmented reality (AR) and virtual reality (VR) headgear while teasing metaverse products expected later this year.
Zuckerberg acknowledged that Meta’s “transition to short-form video … doesn’t monetize as well for now,” but added, “We’re quite optimistic about [monetization] over the long term.”
He noted that Instagram users are now spending 20% of their screen time watching Reels videos, and 50% of Facebook screen time is now going to video. Other parts of the business are not as dynamic at present.
“The acceleration of eCommerce led to outsized revenue growth, but we’re now seeing that trend back off,” he said, adding that “with our current business growth level, we are now planning to slow the pace” of investments in the AI business platform and Reality Labs.
Meet the Metaverse
As for the Metaverse itself, Zuckerberg said the company plans “to launch a web version of Horizon later this year that will make it easy for people to step into the metaverse experiences from a lot more platforms even without needing a headset.”
Later this year, Meta also plans to release “a higher-end headset codenamed Project Cambria, which will be more focused on work use cases, and eventually replacing your laptop or work setup,” as well as eye tracking and instant facial expression emulation for avatars inside Horizon.
Read more: Meta Store Will Be IRL ‘Gateway to the Metaverse’ With Ray-Ban Stories and More
Feeds, Stories and Reels — in other words, content — featured heavily as Zuckerberg described how Meta AI is now placing posts in people’s news feeds from outside their personal universe of connections and follows, pulling from “millions of pieces of content” on the platform.
“I think about the AI that we’re building not just as a recommendation system for short-form video, but as a discovery engine that can show you all of the most interesting content that people have shared across our systems in Facebook,” he said.
Advertising remains a key concern for Meta with Apple’s privacy changes making it harder for advertisers and brands to track and capture user behavior data from ads. Meta estimated that Apple’s data privacy change may cost the platform in the vicinity of $10 billion in 2022.
Asked about cohort-based targeting, ID free and privacy-centric targeting as innovations to recoup the $10 billion in estimated ad revenue loss, Chief Operating Officer Sheryl Sandberg said, “If our commerce efforts are successful over the longer term, we’ll be able to close that loop directly on our own service.”
Apple got a fair amount of attention on the Meta Q1 earnings call as analysts asked how the company plans on dealing with more changes coming in the next iteration of iOS, with Zuckerberg calling signal loss resulting from Apple’s iOS changes “a meaningful headwind.”
Meta is responding by “growing first-party understanding of what people are interested in by making it easier for people to engage with businesses and our apps, whether that’s completing purchases on Facebook or Instagram, or messaging businesses on WhatsApp or Messenger.”
Sandberg said that Meta is “evolving ad systems to do more with less data” through development of privacy-enhancing technologies, adding, “We’re significantly increasing our investment in AI and machine learning across the company this year, and a large portion of this is going towards ads” less dependent on “individual level data.”
On the regulatory front, Sandberg said “the rules that are governing the internet are being rethought and rewritten, certainly in Europe, but increasingly around the world,” adding that Meta expects the European Union’s Digital Markets Act (DMA) “to have significant challenges for our industry. We’re working with European regulators on these rules.”
See also: Meta, Google Agree to UK Ad Rule; Will Twitter Follow?