The news: At the IAB NewFronts, Meta and TikTok went head to head in competing for ad dollars.

Why it matters: Both rivals are at a major inflection point, with a potential TikTok ban looming, while Meta faces concerns over lagging innovation after slow Q1 growth.

Meta’s newness:

• The company announced AR Ads are launching globally across Reels (both Instagram and Facebook) and Facebook Stories; Sephora created a successful AR experience in a recent ad test, resulting in increased reach and engagement.
• Meta is also testing bigger call-to-action buttons and extra info on Reels ads.
• On Facebook, users can now pause video ads and preview the linked destination.
• New multi-destination product ads let users swipe through products without leaving a Reel.
• Meta also announced Reels viewability is now accessible to third-party measurement partners for interstitial Reels Ads campaigns. The social giant will be launching viewability reports with DoubleVerify, IAS, and MOAT.

TikTok’s pitch:

• The platform unveiled Pulse Premiere and other TikTok Pulse ecosystem updates. Expanding from last year's Pulse, which allowed marketers to pair their brand with top 4% content, Pulse Premiere better targets audiences and benefits publishers. Launch partners include BuzzFeed, Conde Nast, DotDash Meredith, Major League Soccer, NBCUniversal, and WWE.
• Pulse Premiere lets brands appear alongside premium publisher content on the platform. Ads are placed after videos from premium partners in various categories, such as lifestyle, sports, entertainment, and education.
• In theory, Pulse Premiere should generate significant revenue for premium publishers producing engaging TikTok content while simultaneously offering brands control by placing ads after suitable premium publisher TikToks in the For You feed.

Our take: TikTok’s announcements are partner-heavy. Clearly, prospective advertisers are not being scared by the prospect of a US TikTok ban—perhaps because nearly half of US voters oppose such a move, partners view it as unlikely to come to fruition, despite TikTok bans spreading worldwide.

• TikTok’s move comes the same week that competitor Snap unveiled attempts to drive more influencer marketing dollars through its own platform, building on its announcements at its April partner summit.
• TikTok needs to continue to offer ad products for another reason: The fight for short-form video dollars is heating up. Earlier in the week, YouTube announced a number of ways advertisers can incorporate Shorts into their ad campaigns.
• Meta is leaning into AR at a time when more than one in four US adults use the technology, per our forecast; by 2027, that figure will rise to 30.7% of the population and 33.8% of all internet users. AR ads boost brand performance, particularly among Gen Z: Meta campaigns with AR effects surpassed non-AR ones, enhancing ad recall for 18- to 24-year-olds in 87% of cases, per company data.

The final word: We expect digital ad spending to increase 9.5% this year (globally) and social media ad spending to grow 3.4% (US only). Given the restricted growth potential, Meta and TikTok are fiercely competing to capture a larger market share.

Go further: Read our recent report on how Reels and Shorts stack up against TikTok.