Specialist
Former manager at Instagram (Meta Platforms Inc)
Agenda
- Video strategies of Meta Platforms (NASDAQ: FB), Facebook and Instagram, focusing on Reels
- Competitive landscape, highlighting the success of TikTok
- Outlook for Reels and related offerings
- Monetisation – approach and related challenges and opportunities
Questions
1.
On 23 May, one month after it last issued guidance on 21 April, Snap essentially pre-announced that the macroeconomic environment has deteriorated further and faster than anticipated. I think some other companies, including Twitter and Meta, have reportedly paused or frozen some types of hiring, so the macroeconomic environment does seem to have taken a turn for the worse. What 2-3 things should we think about given the news from Snap and other companies? Why do you think Snap pre-announced and not others? Does it potentially have more vulnerability to the broader economic environment?
2.
It seems you’re saying times have been getting tougher and that’s expected to continue. What has happened over the last month that seems to have shifted things or made them significantly more challenging? Why is Snap coming out first and saying things are difficult and they’re negatively impacting its operational and financial performance, while other companies haven’t done that yet? Do you expect the other companies we’ve mentioned to also pre-announce or provide some disappointing news in conjunction with their results? How should we assess the current environment?
3.
Advertisers and their spending are clearly driving many of the recent updates. What do you think advertisers are doing in the current environment? They seem to be pausing or cutting spending, and I’m guessing if Snap is feeling the brunt right now then there’s a specific reason for that and perhaps other connectivity or after-effects you might think about. What do you think are the impacts of what advertisers are or aren’t doing and what are the industry players doing in response?
4.
I imagine that during your 4-5 years with Meta and Instagram you saw cycles where something happens suddenly and people pause or cut back spending, though I appreciate iOS 14.5 was rolled out just as you were exiting. I assume you saw these cycles in March 2020. What do you think is going on behind the scenes? Are advertisers hitting the pause button and saying they’ll revisit over the summer? Could they be outright cutting 5-10% or more of budgets with the possibility of that returning as they plan Q4 2022?
5.
I think a lot of people view the short-form video category as essentially a two-horse race. You’ve mentioned TikTok, who I think most would acknowledge as the breakaway leader, but you have Meta, Facebook and Instagram too and they’re all focused on and pushing for Reels. Could you outline the industry backdrop and how you see it in terms of short-form video?
6.
You mentioned how Meta’s algorithm around Reels isn’t anywhere near as good as what TikTok has. How close do you think Meta is now and how much ground has it made up? Is it the right approach to try to do what Meta did with Snap and Stories and essentially copy and maybe perfect it because it works? Given what you were saying, it seems that may not be the right strategy.
7.
What do you think Meta will do next? I think the company has been different to many social media companies historically in that it’s separated out platforms because of increasing complexity within one. It famously did that with Messenger and I think it’s looked to do so in other contexts as well. You seem to be saying Instagram is doing the opposite, so what do you think the path forward should be here?
8.
Meta said recently that more than 20% of users’ time on Instagram is spent in Reels, so to your point, it’s everywhere and people are using it at least to some extent. It seems there’s a strategy behind that and, as a specialist in a previous Interview [see Short-form Video & Social Media Landscape – TikTok, Facebook, Instagram & Others – 24 May 2022] said, the strategy is basically to drive engagement and keep people on Meta platforms and services. Do you think the company has been successful if that was and is the goal?
9.
Do you think the 20% cited by Meta as time spent by Instagram users on Reels is inflated? Could it be too low? What do you think the actual percentage could be if you applied the standard way of measuring time spent or engagement? Could it be closer to 10%? How should we contextualise what Meta said vs how you think we should understand it?
10.
A specialist in a previous Interview [see Short-form Video & Social Media Landscape – TikTok, Facebook, Instagram & Others – 24 May 2022] said that one of Meta’s big problems, now and in the future, is people moving over from News Feed, from Stories to Reels. That’s just where the world is moving, so it’s happening on Meta and its platforms. The problem is that Reels monetises at much lower rates than those more established and successful offerings. How should we think about monetisation, particularly for Reels? How does it compare to other areas within Meta or even a platform such as TikTok?
11.
Meta recently announced some new related programmes and incentives to get more creators and content on the platform. It sounds like you’re saying that just won’t move the needle, the company’s best intentions and resources notwithstanding, because it hasn’t for other platforms. What’s the solution? How can Meta attract more creators and content to the platform? You mentioned inventory and supply issues and creators being on these platforms and not returning after they’ve fulfilled contractual obligations. How can the company fix this and get people wanting to produce the content volumes that will fuel the rise of Reels?
12.
You seem sceptical about what Meta can do up and down the three points you mentioned. Is that a fair characterisation? What do you think the company’s odds are?
13.
It seems TikTok and monetisation is the direct link between video and e-commerce, and that’s very popular in Asia. I’m talking about advertisers using video as a vehicle not just to advertise but to actually engage in a sales process. I think the pieces have started coming together in the US when you look at what Meta is doing with video and shopping. Do you think the company can figure that out? TikTok seems to be going in that direction, and it appears to have the video piece figured out but perhaps not so much the e-commerce piece, at least in the US. Perhaps the opposite is true for Meta. How would you break that down?
14.
What do you think will happen? You have TikTok as the established fast-growing leader and then Meta seems to be scrambling, trying a lot of different things and having some trouble. What do you think the company will do and what should it do to put Reels and the short-form video strategy on a better track to success?
15.
You suggested it’s early to think or talk about CPMs for Reels, and many think Reels will monetise at lower rates even when it becomes more mature and global, perhaps far lower than we’ve seen for News Feed and Stories. Can you give some context there? What would you expect in terms of parity or discount, and when might we reach that point?
16.
You mentioned iOS 14.5 and IDFA [Identifier for Advertisers], and I think many people are focused on Apple’s Worldwide Developers Conference and the possibility of further changes and adjustments that make the environment even more challenging for Meta, Facebook and Instagram. Do you have a sense of that? There seems to be a lot of questions as to whether Apple is done with these kinds of changes and how Meta will potentially respond.
17.
Are there broader themes or initiatives you could see Meta, Facebook and Instagram embracing to not just overcome some of the IDFA challenges, but to actually be more successful, particularly with Reels?
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