Meta has set up a product organization to identify new “potential paid features” for its family of popular apps, after Apple’s ad-tracking changes have severely impacted its advertising business. a new internal memo reveals.
The decision comes as the California-based company faces a variety of challenges.
Facebook announced in July that its second-quarter revenue fell 1% annually to $28.8 billion. Net income – earnings – plummeted 36% to $6.7 billion compared to last quarter.
Apple’s new “ask apps not to track me” feature on the iPhone’s prompt reportedly cost Meta $10 billion in advertising revenue last year alone. In its recent earnings call, the company predicted a further decline in third-quarter revenue, from $26 billion to $28.5 billion, and said “continued weakness in advertising demand” will weigh on sales.
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Meta is setting up a product organization to identify new “potential paid features” for its popular app family, after Apple’s ad-tracking changes have severely impacted its advertising business.
Facebook announced in July that its second-quarter revenue fell 1% annually to $28.8 billion, and that growth could slow further next quarter.
Facebook has reported a quarterly decline in daily users for the first time this year, trying to convince investors it can compete with TikTok in user numbers.
John Hegeman, vice president of monetization at Meta, which oversees the group, told The Verge:
Hegeman didn’t elaborate on the paid features being considered.
Hegeman seemed to downplay the fact that paid features will become a critical part of the business in the short term, but “on the flip side, it creates new value and a meaningful revenue line, and some If there is an opportunity to offer diversity, it will obviously be attractive.
Meta’s vice president of monetization, which oversees the group, told The Verge:
WhatsApp currently claims the right to message customers to certain business accounts, and Facebook group admins are allowed to claim access to some content. But most of the billions of people using Facebook, Instagram, and WhatsApp have free access.
The group, called New Monetization Experiences, will be led by Pratiti Raychoudhury, the former head of research at Meta, according to The Verge.
WhatsApp currently claims the right to message customers to certain business accounts, and Facebook group admins are allowed to claim access to some content. But most of the billions of people who use Facebook, Instagram, and WhatsApp have free access.
In the long term, Meta believes paid features will become a more meaningful part of its business, Hegeman said. “With five years of time on his horizon, I think it can really move the needle and make a pretty big difference.”
That said, the company is clearly struggling as it faces headwinds such as Apple’s push for privacy, increased competition from the popular TikTok, and a slowdown in widespread advertising.
“It looks like we’re entering a recession that will have far-reaching implications for the digital advertising business,” Zuckerberg said.
“We are slowing down [our] We made an investment and pushed some costs that would have happened in the next year or two to a slightly longer timeline.
One of those costs appears to be hiring and staffing, and Zuckerberg says he wants leaders within the company to choose how to restructure their teams.
“I want leaders to be able to make minimal decisions about where to double down within the team, where to double down, where to backfill attrition, and where to reorganize the team. increase. [the impact] for long-term initiatives.
Zuckerberg continues to promote the company’s metaverse plans. A recent avatar he shared was criticized online for looking “dead-eyed” and “creepy.”
Meta is also developing a range of new augmented and virtual reality headsets as part of its planned multi-billion dollar expansion into the Metaverse.
Late last month, an outraged Zuckerberg warned employees that he would eliminate underperforming employees with “aggressive performance reviews” as the company prepared for a deep recession.
“I’m pretty sure this could be one of the worst recessions in recent history,” Zuckerberg said during a question-and-answer session with employees on Thursday.