Meta, formerly known as Facebook, has been struggling to bounce back from the Apple privacy changes of last year. Following the implementation of App Tracking Transparency, many users opted out of being tracked, resulting in a major drop in revenue for the company. CEO Mark Zuckerberg noted that it led to signal loss for the company’s advertising business, which prompted them to cut thousands of jobs in November of 2022.
However, recent predictions from Ron Jacobson, CEO and co-founder of Rockerbox, an ad measurement company, have brought optimism for a Meta resurgence. Jacobson stated that Meta’s ad performance is getting close to pre-ATT levels and that the company has employed artificial intelligence to its ad targeting. Wall Street analysts approved and Meta’s shares have risen 131% over the past five months.
Despite rumors of a turnaround, it is important to remember that digital advertising remains in an “ad winter” and budgets are still tightening. McCarthy Analytics noted that when times are tough, most marketers go back to the “tried-and-true” channels of Google and Meta. Meta’s ad impressions grew 23% in the fourth quarter of 2022 compared to the previous year.
Earlier in 2021, CEO Mark Zuckerberg announced 2023 to be a year of efficiency, and these efficiency measures include further layoffs and cost-cutting. Despite these measures, Wall Street analysts remain confident for Meta’s growth this year. They are expecting a return to double-digit revenue growth this year, something that hasn’t happened since the fourth quarter of 2021.
User engagement on Instagram and Facebook have seen a rise this quarter, driven in part by Meta’s new Reels feature. This is good news for the company as Reels offers immense potential for the generation of revenue. Analysts at Bernstein have also noted that the ” AI investments are paying off.”
Overall, Meta seems to be on the cusp of getting back to its major business growth and recovering from the Apple privacy changes. Meta will be releasing its first quarter earning report in April, and it will provide more clarity on the company’s ad targeting and overall growth. Meanwhile, Wall Street and analysts remain confident in the company’s potential and ability to make a recovery.
