Benzinga - by Ananya Gairola, Benzinga Staff Writer.
During Meta Platforms Inc.’s (NASDAQ:META) third-quarter earnings call on Wednesday, CEO Mark Zuckerberg stated that the Reels, the feature that was introduced as the company’s answer to TikTok’s short video format, has transitioned from its initial stages to an established component.
What Happened: During the call, Zuckerberg said Reels’ impact has been substantial, leading to a 40% increase in time spent on Instagram since its launch. It has also reached a monetization milestone earlier than expected, achieving net neutrality in the company’s ad revenue.
“We estimate that with all the ranking and product improvements that we’ve made, Reels has now driven more than 40% increase in time spent on Instagram since launch,” Zuckerberg said, adding that “in many ways, Reels has now graduated from being an early initiative to now being a core part of our apps.”
Meta’s CFO, Susan Li, outlined the company’s approach to improving Reels’ advertising performance through ranking enhancements and increased interactivity. She also anticipates that Reels will provide a modest revenue boost in 2024 while striking the right balance between user engagement and revenue growth.
“We will still work to further improve Reels ads performance through ranking improvements and making Reels ads increasingly interactive, while also growing supply to give businesses more opportunities to get in front of people,” said Li.
Why It’s Important: Meta introduced Reels on Instagram and Facebook in 2020 and 2021, respectively, in order to compete with TikTok, the popular short-video app owned by ByteDance.
Last year, Zuckerberg said, “Reels is already our fastest growing content format by far,” while launching the feature in more than 150 countries.
Previously, it was reported that Morgan Stanley surveyed in April, studying tech adoption among 2,000 people. The results showed that 74% of Instagram users are now using Reels, an increase from 69% in September and 62% in March last year.
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