The news: In a surprise to no one, Facebook and Instagram parent Meta did not turn its fortunes around in Q3.
Q3 in hindsight:
Looking ahead: Our newly updated forecast sees the company’s ad revenues dropping 3.7% in the US this year. 2023 will bring a return to higher revenues, but even then, two-year annualized growth will come to just less than 1%.
The TikTok problem: The reason why Facebook purchased Instagram years ago has since become clear: It was the Facebook killer. Now, Instagram is going up against the Instagram killer.
Analyst insight: “To return to stronger growth, Meta needs to turn its business around,” said principal analyst Debra Aho Williamson. “As Facebook Inc., it was a revolutionary company that changed the way people communicate and the way marketers interact with consumers. Today, it’s no longer that innovative groundbreaker.”
The big takeaway: All Meta needs to do for us to adjust our Facebook and Instagram numbers upward, and keep advertisers engaged is this: more ad innovation; monetize Reels at a faster rate; solve out-of-control inflation; get Apple to reverse its 2021 changes; greater geopolitical stability' hope that TikTok implodes; and talk less about the metaverse. Then everything will be fine.
Go further: Read our new report, The Future of Meta, which gives readers a two-year look at the company’s fortunes.
One Liberty Plaza9th FloorNew York, NY 100061-800-405-0844