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Meta’s preparation for a rocky second half could serve as a blueprint for brands and agencies alike

The news: In an internal memo, Meta’s chief product officer Chris Cox has warned staff that the second half of 2022 will be very challenging for the digital advertising leader, per Reuters.

In the memo, Cox outlined the major areas where the social media behemoth planned to spend, including Instagram Reels (more on that later), social commerce features, and investing in AI to drive content recommendations similar to what TikTok does.

Missives from the memo:

  • “The headwinds are fierce.”
  • “We need to execute flawlessly in an environment of slower growth.”
  • “Teams should not expect vast influxes of new engineers and budgets.”
  • “We must prioritize more ruthlessly, be thoughtful about measuring and understanding what drives impact … and operate leaner, meaner, better exciting teams.”

Zoom out: This comes in the wake of last year’s Apple's update, which limited the company’s ability to target ads to specific audiences.

  • Earlier this year, Meta CFO David Wehner issued a warning about a probable decline in advertising income.
  • Cox’s memo comes as industry experts caution against stagnant advertising expenditure and businesses prepare for a potential US recession.

Action items: Cox’s memo offers broader takeaways for brands and agencies looking to weather what is expected to be a turbulent second half.

  • Don’t expect more help: Companies are seeing open headcounts disappear. That trend is likely to continue for some time. Finding creative ways to do more with less will become an expectation for most of our readers.
  • Prioritize key projects: Just as with Meta’s focus on Reels, companies of all stripes will be tasked with focusing on a finite number of initiatives and putting others on the back burner.
  • Improve execution: Advertisers will be pushed to extract more value from publishers, which will include heightened scrutiny of metrics like ROAS and CPM.

Why it matters: The Cox memo suggests Meta will be focusing on what works, like a new Instagram feature that automatically converts video uploads into Reels, and less so on long-term projects, like its metaverse ambitions.

  • Meta’s focus on its core business is representative of the conversations being held in numerous boardrooms—and serves as a guide for what the rank-and-file ought to aim for in the second half of the year.