From $3B to $10B: Meta's AI-Driven Reels Skyrocketed Revenue Growth Beyond Expectations

During Meta Platforms Inc.’s (NASDAQ:META) second-quarter earnings call, Mark Zuckerberg highlighted the substantial impact of AI investments on the $10 billion revenue surge, with Facebook and Instagram Reels playing a central role.

What Happened: During the earnings call, Zuckerberg said that AI-recommended content from unfamiliar accounts has become the fastest-growing category on Facebook’s feed. 

The strategic introduction of these AI-powered recommendations has resulted in a substantial 7% increase in overall time users spend on the platform. 

“This improves the experience because you can now discover things you might not have otherwise followed or come across.”

See Also: Meta Platforms Faces Limited Upside Potential Amid TikTok’s Momentum and Revenue Headwinds, Analyst Says

According to Meta CEO, a crucial component of this discovery engine is the explosive popularity of Facebook and Instagram Reels. With both platforms collectively amassing over 200 billion daily plays, Reels have revamped content discovery, offering users an interactive way to explore new content beyond their regular network.

The positive effects of Reels on user engagement have translated into remarkable revenue growth. Zuckerberg proudly announced that the annual revenue run rate across Meta’s apps, driven significantly by Reels, has surpassed an impressive $10 billion. This incredible achievement represents a substantial increase from the $3 billion revenue reported last fall.

“Investments that we’ve made over the years in AI, including the billions of dollars we’ve spent on AI infrastructure, are clearly paying off across our ranking and recommendation systems and improving engagement and monetization,” Zuckerberg said. 

Why It’s Important: In June, Meta shared how AI affects recommendations on Facebook and Instagram. The tech giant also introduced new tools, like ‘Feed Preferences’ for Facebook and the ‘Suggested Content Control Center’ for Instagram, which allows users to control what they see. 

Image Credits – Shutterstock

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