Meta Sees Promise in Monetizing Apps With Shop Ads, Click to Message

With Meta’s battered stock doubling in the past 3 months, it’s not all about the money-losing metaverse anymore.

This, as shares of Meta Platforms jumped over 20% in early trading Thursday after reporting that it is seeing more engagement with its apps, and sees potential to monetize that engagement.

To that end, and as reported by the company, the number daily active people across the company’s family of apps — Facebook, Instagram, Messenger, and/or WhatsApp — was just under 3 billion in December, up 5% from last year.

Monthly active people, as a metric, was 3.7 billion as of the end of the year, an increase of 4% year on year. Facebook daily active users gained 4% to 2 billion.

Ad impressions and price per ad impressions delivered across Meta’s apps increased by 23% year over year. The company’s earnings supplementals show average revenue per person came in at $8.63, down from $9.39 in the same quarter last year, but up from $7.53 in the third quarter.

“I said last quarter that I thought our product trends look better than most of the commentary out there suggests,” CEO Mark Zuckerberg said during the call. “And I think that’s even more the case now,” adding that “the number of people daily using Facebook, Instagram and WhatsApp is the highest it’s ever been.”

Against that backdrop, and with a nod to the AI initiatives already in place, Zuckerberg said that Facebook and Instagram are “shifting” from being organized solely around people and accounts to a model that shows relevant content.

Related news: Meta Is Losing Over $1B a Month on Metaverse Strategy

The company’s “monetization efficiency,” as Zuckerberg put it, has doubled for Facebook in the past six months. Advertisers saw 20% more conversions than in the year before. More than 40% of the company’s advertisers are also using Reels, he said. And as reported here late last year, Meta had made it easier for businesses to create ads using Reels.

Eyeing Business Messaging and B2C Conversations on WhatsApp

“We continue to be excited about the monetization opportunity with business messaging too,” Zuckerberg said, with messaging being a significant business pillar in the years ahead.

With a nod towards WhatsApp, the CEO said that more firms are being onboarded onto the WhatsApp business platform, where they can answer customer questions and sell directly in the chat function.

In an example of cross pollination, he said that Air France has started using WhatsApp to share boarding passes. Meta CFO Susan Li said during the call that “other revenue” was $184 million in the fourth quarter, up 19% with “strong business messaging revenue growth from our WhatsApp business platform.”

Li said on the call that the firm’s advertising revenue was $31.3 billion, down 4%, but up 2% on a constant currency basis.

“Revenue remained under pressure from weak advertising demand, which we believe continues to be impacted by the uncertain and volatile macroeconomic landscape,” she said.

Declines in the financial services and tech verticals were the most notable in the quarter, but online commerce and CPG were also lower. The company sees longer term opportunities to scale conversions via Shop Ads and click-to-message ads, which link consumers and businesses into direct conversations across WhatsApp, Messenger or Instagram.

During the question-and-answer session with analysts, Javier Olivan, Meta COO, said that they are continuing to test Shop Ads and said “we’re seeing increased performance by helping direct the consumer…to where they’re most likely to purchase…it’s a small base, but just to give you a sense, we saw triple digit growth in both revenue and adoption across Q4.”

Editor’s Note:  Updates to add market reaction and details.