Meta Platforms, Reels, Facebook, TikTok rivalry, short-video product, social-media, Mark Zuckerberg
BY SALVADOR RODRIGUEZ | UPDATED FEB 22, 2022 12:00 PM EST
Social-media giant, facing a number of business challenges, also introduces many new features for advertisers
Meta Platforms Inc. ramped up its counterattack against TikTok by launching its short-video product Reels for all global Facebook users on Tuesday and introducing many new features for advertisers.
In one of a number of business challenges facing the social-media giant, Meta is in the midst of an intensifying battle with TikTok, which was the most-downloaded app of 2021 and overtook Instagram in popularity among coveted young users.
Meta has also been buffeted by the impact of a privacy feature introduced by Apple Inc. last year that disrupted its digital-advertising business. Since Meta’s Feb. 2 earnings report, in which it highlighted these issues, the company’s market value has fallen by more than $300 billion.
On the earnings call, Chief Executive Mark Zuckerberg announced that Reels has become Meta’s fastest-growing content format by far, even as he acknowledged TikTok as a formidable competitor.
Mr. Zuckerberg also noted that as more users spend time on Reels, they are spending less time on Meta’s Feed and Stories formats, which currently generate more ad revenue.
With Tuesday’s announcements, Meta is taking steps toward addressing these issues.
By expanding Facebook Reels globally, Meta will introduce its new content format to users in more than 150 countries. Meta on Tuesday will also begin testing new ads that will run alongside Facebook Reels from all creators in the U.S., Canada and Mexico as well as “more countries in the coming weeks,” the company said in a blog post. The company also said it would introduce a number of new video-creation and monetization features.
“We want Facebook Reels to be the best place for creators to connect with their community and make a living,” Mr. Zuckerberg wrote in a post Tuesday.
The company said video now accounts for more than half the time users spend on Facebook and Instagram.
Meta introduced Reels in August 2020 to its Instagram users in the U.S. as the company’s response to TikTok, which is owned by ByteDance Ltd. The company then introduced Reels to U.S. Facebook users in September 2021. Before Tuesday’s announcement, Facebook Reels had already been made available in Canada, Mexico and India, while Instagram Reels is already available throughout most countries.
In a note to investors, analyst Michael Nathanson on Thursday compared Meta’s efforts with Reels to the company’s successful shift toward the Stories format in 2018. That format, in which photos or videos disappear after 24 hours, was pioneered by Snap Inc. but eventually also proved popular among Meta’s users.
“We are encouraged by Facebook’s success with Stories and believe they have a playbook and will be successful in monetizing Reels as well,” Mr. Nathanson wrote.
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