In this edition of the Glossy+ Research Briefing, we analyze Meta’s second-quarter earnings release and highlight new findings about marketers’ use of Meta, as seen in Glossy+ Research’s CMO Strategies series on social media usage and metrics.
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Meta narrowly beat second-quarter projections
Earnings analysis: The digital ad market has shown some signs of struggle. But last week Meta reported sunnier second-quarter earnings results than competitors like Alphabet and Pinterest. In July, Alphabet reported lower-than-expected ad revenue growth for YouTube, and last Tuesday Pinterest issued disappointing third-quarter guidance that led to a 15% plunge in shares after hours.
Ahead of Meta’s second-quarter earnings results, analysts expected a 20% increase in ad revenue for a total of $38.26 billion. Meta narrowly beat analyst’s projections, earning $39.07 billion for the quarter ended June 30. Although its revenue jumped significantly, Meta is still recovering from a difficult 2022 when the company lost nearly two-thirds of its value and advertisers cut drastically on spending.
To make up for the loss, Meta was forced to look beyond its ad revenue and bulk up its AI offerings. CEO Mark Zukerberg believes it’s best to build computing capacity before it’s needed, rather than waiting for the long lead times associated with building new infrastructure. Last week, Meta announced its latest open-source large language model (LLM) “Llama 3.1.” The LLM was built to compete with closed-source models like OpenAI’s ChatGPT.
Meta’s Reality Labs segment, which includes its mixed reality hardware and software, saw revenue of $353 million for the quarter ended June 30. However, the segment lost $4.49 billion, a steeper drop from the first quarter which saw a $3.8 billion loss. During Meta’s second-quarter earnings call, Zuckerberg told analysts he plans to keep up spending on this segment.
Research findings: In last week’s earnings call, Meta announced that the number of daily active users across its Meta platforms (Facebook, Instagram and WhatsApp) grew to 3.27 billion on average for June 2024, an increase of 7% year over year. Not surprisingly, marketers are chasing this growing group. According to Glossy+ Research’s CMO Strategies survey, marketers’ use of both Instagram and Facebook is on the rise compared to last year. Marketers’ use of Instagram increased by 4 percent points, while their use of Facebook increased by 8 percentage points. Both Facebook and Instagram benefit from being veterans in the social space and from offering marketers out-of-the-box-ready ad options, such as Instagram’s in-feed ads or Facebook’s Messenger ads.
