Meta says time spent on Instagram increased by 24% thanks to TikTok-style AI Reel recommendations

Meta on Wednesday shared updated information on engagement around its platforms during its Q1 2023 quarterly earnings call, with Meta CFO Susan Li joining CEO and Founder Mark Zuckerberg to answer questions from analysts about its results. . Zuckerberg shared that time spent on Instagram has increased by more than 24% since the company launched Reels on the platform thanks to AI-powered content recommendations – i.e. the type of videos no-login recommended apps that TikTok has essentially built its entire brand on.

“We’re very pleased with what we’ve seen Reels drive in terms of incremental engagement on the platform so far,” Li said later in response to an analyst question, adding that “it’s clear that people appreciate short-term video” on the platform. She further clarified that Instagram is also seeing a lot more sharing around Reels in recent months.

“We’re seeing share steering take off with Reels shares, with shares doubling over the last six months,” she said.

Li seemed hesitant to answer an analyst’s question about whether Reels had a similar impact on Facebook proper, but repeatedly noted that on FB, AI-based recommendations that don’t come from direct connections increase user engagement.

While Reels and AI recommendations drive more engagement on Instagram, that doesn’t translate directly to more revenue yet. In fact, Li acknowledged that Reels actually cannibalizes some revenue from feed-based stories and posts because they represent a portion of the time users would have spent engaging with that content. The broader trend, however, is gradual, meaning overall usage time is increasing, which Li says will ultimately be a bright spot for revenue potential. She said Reels was on track to be revenue neutral by year-end or early 2024, and expected positive contributions thereafter. She pointed out that there will be product work to find appropriate monetization for Reels, as they are “structurally different” from existing Instagram content types.

“We have no line of sight to bring Reels to monetization parity with Stream or Stories at a time due to these structural differences,” but as this leads to incremental growth, she said they were convinced that they would eventually become a key contributor to monetization. .