Quick take:
- Meta is reportedly dropping the Metaverse out of its advertiser pitch deck.
- The company is now offering discounts of up to 25% to those willing to test other products like Reels and AI tools.
- Mark Zuckerberg recently ruled out reducing expenditure on the metaverse saying Reality Labs spending will only continue to rise.
Meta has reportedly removed the metaverse from its advertiser pitch deck. According to a report published by The Information, the social media giant is offering discounts of up to 25% to those willing to test its other exciting products including Reels — its TikTok alternative, and AI tools like Advantage+.
One Ad executive who spends more than $200 million annually with Meta told The Information the company was “offering advertisers sweeteners such as discounts of as much as 25% for those willing to spend a certain amount testing different ad products on TikTok-rival feature, Reels,” taunting the amount as being unusually high.
Interestingly, Meta has previously been demanding that ad agencies commit to increases in spending of 20% or more per year. The massive change in stance seems to be linked to the company’s recent drop in ad revenue. In the fourth quarter of 2022, the company reported a revenue decline of 4% from the previous year. Meta had reported an ad decline of a similar percentage in the preceding quarter.
In February, Meta CFO Susan Li attributed the falling ad revenue to a decline in demand. “Weak advertising demand, which we believe continues to be impacted by the uncertain and volatile macroeconomic landscape,” she said.
Since the turn of the year, Meta has been slowly shifting focus to new products, especially artificial intelligence prompting some publishers to conclude the company may be pulling away from the immersive 3D tech that dominated headlines last year.
But those headlines may not be misleading if the Meta Chief Technology Officer’s comments are reflective of what is really going on behind the scenes at Meta’s Headquarters in Menlo Park, California.
Earlier this month, Meta CTO Andrew Bosworth told Nikkei in an interview the company was investing more time in artificial intelligence.
“We just created a new team, the generative AI team, a couple of months ago; they are very busy,” he said. “It’s probably the area that I’m spending the most time [in], as well as Mark Zuckerberg and [Chief Product Officer] Chris Cox.”
Furthermore, Meta has been laying off staff in a bid to cut costs. Last year, the company’s Reality Labs, the unit driving its metaverse campaign reported a deficit of $13.7 billion. Meta has since laid off more than 11,000 staff, and in March announced a further 10,000 employees were set to lose their jobs.
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