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More than 4 million advertisers are now using the company’s generative AI offerings, which include image, video and text generators.
Pricing growth continued to propel Meta’s core advertising business in Q4 2024, with the average price per ad up 14% around the period that includes the holiday shopping window. The social media giant for some time has tried to balance the ramp up of newer, lower-monetizing surfaces that are popular with users, such as short-form video Reels, with improved precision for mature advertising formats. Meta also recently introduced ads to Threads, a micro-blogging app that competes with Elon Musk’s X, but doesn’t expect Threads advertising will meaningfully contribute to revenue in 2025.
Strong earnings results followed a whirl of media attention around Meta, including CEO Mark Zuckerberg’s chummier relationship with President Donald Trump, a pullback on fact-checking initiatives and the fast rise of a generative AI platform from China called DeepSeek that has threatened U.S. rivals like OpenAI. The fact-checking retreat has raised some alarms in the advertising community but has not appeared to deliver a material impact on advertiser demand.
“From an ad revenue perspective, Meta dominated Q4 by pulling in considerably more revenue than any other quarter in the last two years,” said Forrester Vice President and Research Director Mike Proulx in emailed comments. “The big question is whether advertisers will stick with Meta in Q1 against a backdrop of heightened brand safety concerns. While they might not like it, they will continue to spend given Meta’s reach and effectiveness.”
Meta has focused its generative AI efforts around open-source technology that other developers can draw on when building their own models. That’s exactly what DeepSeek did, as reported in The New York Times, and Meta sees potential upsides for its own business as AI dominates the agenda.
“I think there’s a number of novel things that [DeepSeek] did that I think we’re still digesting … they have advances that we will hope to implement in our systems,” said Zuckerberg, who has called 2025 a “defining” year for AI, on a call discussing the earnings with analysts. “That’s part of the nature of how this works, whether it’s a Chinese competitor or not.”
Meta plans to spend between $60 billion and $65 billion on its AI infrastructure bets and hiring this year. Meta AI, its personal assistant, currently reaches about 700 million monthly active users, with leadership projecting that number could reach 1 billion this year.
Continuing to advance generative AI could also convince more advertisers to try out the technology. Meta has steadily rolled out generative AI advertising tools, including image, video and text generators, that are now used by more than 4 million advertisers versus 1 million six months ago.
“There has been significant early adoption of our first video generation tool that we rolled out in October, Image Animation, with hundreds of thousands of advertisers already using it monthly,” said CFO Li.
Advantage+ shopping campaigns, part of a larger suite of AI-powered ad products, saw 70% year-over-year growth in Q4, indicating strong demand around the holidays. Advantage+ shopping campaigns have surpassed an annual revenue run-rate of $20 billion, according to Li. Meta is working to streamline access to Advantage+ so advertisers no longer need to choose between running a manual campaign or one powered by the AI offering.
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With global ad spending set to surpass $1 trillion, marketers must navigate myriad challenges, including an uncertain regulatory landscape, with finesse.
Nike’s first big game ad in 27 years and other purpose-driven spots won the night, while ads built on celebrities, humor and politics had an uneven showing.
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With global ad spending set to surpass $1 trillion, marketers must navigate myriad challenges, including an uncertain regulatory landscape, with finesse.
Nike’s first big game ad in 27 years and other purpose-driven spots won the night, while ads built on celebrities, humor and politics had an uneven showing.
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