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> In the first quarter of 2023, ad impressions delivered across our Family of Apps increased by 26% year-over-year and the average price per ad decreased by 17%

> In the first quarter of 2023, ad impressions delivered across our Family of Apps increased by 26% year-over-year and the average price per ad decreased by 17% year-over-year. This seems like a huge problem. Revenue looks ok, but shoving more ads into the products has to come back and bite them eventually right? I'm pretty bullish on META compared to most of this website, but if Mark keeps giving in to wall st. concerns there might be spiralling issues.

londons_explore 4y ago
Those suggest no biting is happening yet... Imagine if they put 10% more ads in, and those ads made users reduce their usage of the apps by 10%... Overall impressions would be level. But that isn't what they see - the impressions number increasing says they are successfully sneaking more ads in, without making many users go elsewhere.
- HDThoreaun 4y ago
  Definitely, but it does seem like they are making their product worse in order to stay flat on revenue. Eventually might they reach a tipping point where the product is no longer better than alternatives and everyone leaves in mass? This seems like an especially big concern for a social network where network effects are so big.
  - londons_explore 4y ago
    I assume that if they detected they were near that tipping point, they could tweak a few configs and within hours dramatically scale back the amount of ads - thereby increasing user engagement and killing any competing networks growth opportunities. I do wonder if they practice and prepare for that case - because the Digg social network failed so quickly (within about 96 hours), I expect they want to avoid the same fate.
  - baby 4y ago
    Personally it hasn’t shocked me the way youtube has started shoving ads down our throats.
mikedouglas 4y ago
This is likely impression expansion from Reels. Same thing happened when Stories was introduced.
- zpeti 4y ago
  Yes. They even said on the last call they are intentionally rolling our reels slower than they could. So reels is a massive engagement and impression success that isn’t even fully exploited
  - loeg 4y ago
    They are slow rolling reels because it cannibalizes more profitable surfaces.
brewdad 4y ago
For whatever reason, my Facebook feed still isn't too bad. The few friends I follow on Instagram however.....damn if that platform is neigh unusable. I think my feed is 70% ads and if I scroll enough it turns into 90% ads.
freyfogle 4y ago
It's very easy to measure revenue and how you are doing against the monthly or quarterly goal. It's very hard to measure whether you put so many ads on the page that people get fed up and don't come back. So the end result is you put more ads on the page, and month by month people drift away. Source: I worked at yahoo! way back in the day and lived through exactly this.
- iamnafets 4y ago
  You can test this. Stratify users into groups with varying ad load and watch retention metrics. There's a bunch of 2nd-order effects that are hard to control, but you don't get to be a business doing billions in revenue without fine-grained understanding here.
  - bombcar 4y ago
    Or you don’t do this on the downward side because the execs won’t like the answer it gives. Certain parts of a datalake are not for fishing in.
  - freyfogle 4y ago
    Oh of course. No doubt the techniques have advanced, but all that was possible even 20 years ago. The question is what do you do when you don't get the answer you want? - when it shows that you are losing audience, though perhaps slowly. It is very difficult/impossible for a manager to say "let's miss this month's revenue goal for the long term benefit of slowing audience loss". And so instead you come with other reasons to explain the audience loss and/or justify keeping the ads. And so the audience loss continues. You are the boiling frog.
- pedrosorio 4y ago
  They do report active users and other metrics related to “users getting fed up and not coming back”.
jstummbillig 4y ago
Also, as another small signal in that vein, WhatsApp cloud api, which used to be effectively free for SMBs, now jumped to 50$/month for us basically over night (ironically making it more expensive than sms). Granted, for most running businesses that's not enough to move the needle but I wonder how many other such levers meta has pulled now and how much it's gonna cost them down the line. When you are in super lean mode you might just not integrate it on day one now. And then some of those just won't, ever.
vthallam 4y ago
We do have backtests that run over a long period of time to check the effects of the big changes that were introduced. Source: I work at Meta.
- HDThoreaun 4y ago
  The other issue is scaling. Will price per ad continue to decrease? If so hwo long can meta continue to increase impressions per user without losing users? Otherwise revenue won't stay flat, it'll decrease.
pricedeveloper 4y ago
That's been going on for long time. Lower price per ad is also being driven by more impressions from lower income countries and lower monetizing surfaces like reels

londons_explore 4y ago

Those suggest no biting is happening yet... Imagine if they put 10% more ads in, and those ads made users reduce their usage of the apps by 10%... Overall impressions would be level. But that isn't what they see - the impressions number increasing says they are successfully sneaking more ads in, without making many users go elsewhere.

HDThoreaun 4y ago
Definitely, but it does seem like they are making their product worse in order to stay flat on revenue. Eventually might they reach a tipping point where the product is no longer better than alternatives and everyone leaves in mass? This seems like an especially big concern for a social network where network effects are so big.
- londons_explore 4y ago
  I assume that if they detected they were near that tipping point, they could tweak a few configs and within hours dramatically scale back the amount of ads - thereby increasing user engagement and killing any competing networks growth opportunities. I do wonder if they practice and prepare for that case - because the Digg social network failed so quickly (within about 96 hours), I expect they want to avoid the same fate.
- baby 4y ago
  Personally it hasn’t shocked me the way youtube has started shoving ads down our throats.

mikedouglas 4y ago

This is likely impression expansion from Reels. Same thing happened when Stories was introduced.

zpeti 4y ago
Yes. They even said on the last call they are intentionally rolling our reels slower than they could. So reels is a massive engagement and impression success that isn’t even fully exploited
- loeg 4y ago
  They are slow rolling reels because it cannibalizes more profitable surfaces.

brewdad 4y ago

For whatever reason, my Facebook feed still isn't too bad. The few friends I follow on Instagram however.....damn if that platform is neigh unusable. I think my feed is 70% ads and if I scroll enough it turns into 90% ads.

freyfogle 4y ago

It's very easy to measure revenue and how you are doing against the monthly or quarterly goal. It's very hard to measure whether you put so many ads on the page that people get fed up and don't come back. So the end result is you put more ads on the page, and month by month people drift away. Source: I worked at yahoo! way back in the day and lived through exactly this.

iamnafets 4y ago
You can test this. Stratify users into groups with varying ad load and watch retention metrics. There's a bunch of 2nd-order effects that are hard to control, but you don't get to be a business doing billions in revenue without fine-grained understanding here.
- bombcar 4y ago
  Or you don’t do this on the downward side because the execs won’t like the answer it gives. Certain parts of a datalake are not for fishing in.
- freyfogle 4y ago
  Oh of course. No doubt the techniques have advanced, but all that was possible even 20 years ago. The question is what do you do when you don't get the answer you want? - when it shows that you are losing audience, though perhaps slowly. It is very difficult/impossible for a manager to say "let's miss this month's revenue goal for the long term benefit of slowing audience loss". And so instead you come with other reasons to explain the audience loss and/or justify keeping the ads. And so the audience loss continues. You are the boiling frog.
pedrosorio 4y ago
They do report active users and other metrics related to “users getting fed up and not coming back”.

jstummbillig 4y ago

Also, as another small signal in that vein, WhatsApp cloud api, which used to be effectively free for SMBs, now jumped to 50$/month for us basically over night (ironically making it more expensive than sms). Granted, for most running businesses that's not enough to move the needle but I wonder how many other such levers meta has pulled now and how much it's gonna cost them down the line. When you are in super lean mode you might just not integrate it on day one now. And then some of those just won't, ever.

vthallam 4y ago

We do have backtests that run over a long period of time to check the effects of the big changes that were introduced. Source: I work at Meta.

HDThoreaun 4y ago
The other issue is scaling. Will price per ad continue to decrease? If so hwo long can meta continue to increase impressions per user without losing users? Otherwise revenue won't stay flat, it'll decrease.

pricedeveloper 4y ago

That's been going on for long time. Lower price per ad is also being driven by more impressions from lower income countries and lower monetizing surfaces like reels