Connect with us


Instagram Head Feels ‘Urgency’ in Trying to Make Reels Work



Instagram head Adam Mosseri says the social media platform is facing “urgency” to make Reels work after its parent company Meta had $80 billion wiped off its market value last month.

In an interview with Bloomberg on Friday, Mosseri said that Instagram was feeling the pressure to drive revenue to Reels as the platform continues to chase TikTok’s domination in short-form video.

Instagram is facing “a fair amount of urgency,” Mosseri tells Bloomberg. “I’m trying to balance that urgency with making sure we don’t make any mistakes by pushing too hard or too fast.”

In the interview, Mosseri noted that the growing popularity of Reels is promising. Time spent perusing videos on Instagram, he explains, is “milestone one.”

But now, the company needs to get to “milestone two” and get Reels advertising to make money as quickly as other places marketers can spend on the app. Instagram aims to drive more revenue via Reels by getting advertisers comfortable with the format, enticing creators to share there, and improving the algorithm so that users get better video recommendations from accounts they do not follow.

“A ranking system that tries to surface what we call unconnected content of photos and videos from sources that you, or accounts that you do not yet follow is a very different technical problem than ranking photos and videos from accounts that you already follow,” Mosseri says. “I’ve been encouraged by the progress, particularly in the last six months, but I think there’s a lot, lot more room to grow.”

“We’ve hit milestone one — we are well on our way but not yet at milestone two.” he adds.

The Race is On For Meta

Meta’s stock price has plummeted about 73% so far this year. In October, the company shares plunged to its lowest price since 2016 after it reported profits had halved during the third quarter.

Meta has faced struggles as the company contends with slowing global economic growth, increased competition from TikTok, and challenges from Apple’s iOS privacy update that undercut its primary advertising model.

Investors also remain unconvinced by Zuckerberg’s bet that the company’s future lies in Reality Labs, its metaverse division. Despite the huge spending, Reality Labs made a $3.7 billion loss over the past three months.

Zuckerberg noted that “Reality Labs operating losses in 2023 will grow significantly year-over-year” and the division will see not see a return on investment for another decade — raising alarm among investors and analysts.

However, amid these struggles, Instagram remains a major growth driver for the company. In an otherwise dreary third-quarter earnings report, Meta revealed that Instagram now has two billion monthly active users worldwide, closing in on the 2.96 billion who use Facebook.

During the earnings call, Meta’s CEO Mark Zuckerberg said that Reels is now the fastest-growing format across Meta’s family of apps and services, hitting a $3 billion annual revenue run rate (ARR) in the third quarter of 2022. He also disclosed that the production and consumption of Reels were 50 percent more than six months ago.

“On Instagram alone, people already reshare Reels one billion times a day through DMs,” says Zuckerberg.

However, Meta’s CEO says that monetization remains a challenge for the format and Instagram’s Reels currently do not generate as much advertising income as Stories or feeds.

He revealed that Reels is costing Meta more than $500 million in lost revenue per quarter. But the company expects to break even with Reels “over the next 12 to 18 months.”

It remains to be seen whether Instagram’s experiment with short-form videos pays off. But the longer Meta takes to make Reels profitable, the less patience investors will have with the money Zuckerberg is pouring into the metaverse.

Image credits: Header by Anthony Quintano, CC by 2.0

Continue Reading

Recent News

Adelaide Adelaide
Digital Marketing11 hours ago

Understanding the Importance of SEO in Adelaide

In the digital marketplace, Adelaide businesses are in a continuous contest to gain the attention of their target audiences. With...

Traveling Nurses Pay Traveling Nurses Pay
Health15 hours ago

Breaking Down the Numbers: Understanding the Average Traveling Nurses Pay

The open road, adventure, and the chance to heal – travel nursing promises an undeniable allure. But amidst the excitement,...

Oily Skin Oily Skin
Fashion2 days ago

Dealing with Oily Skin in Summer: Tips and Tricks

As the temperature rises, those with oily skin often face an additional challenge—maintaining a clear and balanced complexion. Excess oil...

Mountain Wedding Mountain Wedding
Wedding5 days ago

Mountain Wedding Ideas for 2024

A mountain wedding is a stunning choice for couples who cherish nature and desire a distinctive wedding experience. Whether you...

Salon Salon
Health5 days ago

3 Of The Best Ways To Keep Your Salon Clean

It is of the utmost importance to ensure that a salon is kept scrupulously clean, not just for the sake...

Blood Tests Blood Tests
Health5 days ago

3 Reasons You Should Get Blood Tests Every Year

Regular blood tests are essential for preserving general health and identifying potential problems early on. Medical professionals can evaluate your...

Crafts Project Crafts Project
Lifestyle5 days ago

How to Make Your Next Crafts Project Pop

Crafting is a creative outlet that allows individuals to express themselves through various mediums such as paper crafts, sewing, painting,...

Traveling With Children Traveling With Children
Travel7 days ago

5 Things You Need When Traveling With Children

Traveling with children can be both thrilling and challenging, whether you’re embarking on a road trip across the country, navigating...

Prepare For a Pregnancy Prepare For a Pregnancy
Health7 days ago

How to Prepare For a Pregnancy

Pregnancy preparation comprises physical, emotional, and behavioral factors. Preparing well helps improve pregnancy and motherhood. This thorough approach guarantees that...

AI in Healthcare AI in Healthcare
Health7 days ago

What AI in Healthcare Means For You

Healthcare is being transformed by AI, which offers novel answers to difficult health issues. AI has great potential to improve...