Meta, formerly known as Facebook, has reportedly stopped pitching advertisers on the metaverse, and it seems to be distancing itself from the technology. According to a new report from The Information, the company is now prioritizing Reels and AI tools in pitch meetings with advertisers. The move comes as Meta has been moving away from its metaverse ambitions over the past few months, and as the company faces pressure to execute more economically.
Around this time last year, Mark Zuckerberg was all in on the possibilities of the metaverse, which he renamed the company after. But now, the company is embracing cost-cutting and has lost billions of dollars in its efforts to bring virtual worlds to fruition. As a result, the CEO’s enthusiasm for the metaverse appears to be waning.
One ad executive whose firm spends hundreds of millions with Meta told The Information that the company is offering discounts of as much as 25% in the event that a certain amount of money is spent on Reels, and this discount was “unusually large.” Meta is also touting its host of AI tools for advertisers, such as Advantage+, a program introduced last year that uses machine learning to deliver targeted ads across Meta’s social platforms.
Zuckerberg seems to no longer be focused on the metaverse
Meta’s investment in generative AI tools that can assist in creating marketing campaigns could mean short-term gains for the company, which has been facing pressure amid cost-cutting. However, some analysts argue that the company’s shift away from the metaverse raises questions about the technology’s future.
Meta has been turning away from the metaverse as part of the company’s “Year of Efficiency,” which has seen the firm lay off more than 20,000 employees over the last six months. Reality Labs, the division of Meta focused on building the metaverse into a functioning set of products, has lost billions of dollars and is being pressured to execute more economically.
Zuckerberg’s commitment to the metaverse last October and his claim that spending on Reality Labs would only increase now seems to be changing. In a note addressing the most recent round of layoffs, Zuckerberg mentioned the metaverse only twice in over 2,000 words, while AI development was described as the company’s “single largest investment.” In a February call discussing Meta’s 2022 full-year earnings, executives brought up AI six times, while the metaverse was not mentioned at all.
While some analysts may interpret the move away from the metaverse as a sign that the technology is not as promising as it once seemed, others suggest that it may be a strategic move for Meta. With the company’s increased focus on AI, it may be better positioned to invest in technologies that can create new and more immersive virtual experiences, as well as more efficient advertising practices.
Moreover, some suggest that the company’s shift away from the metaverse may reflect broader skepticism about the technology, which has yet to prove its worth in practice. The metaverse has been touted as a potential future for everything from gaming to education to social interaction. However, it remains to be seen whether it can deliver on its promises and whether consumers will be willing to embrace it on a large scale.
Meta’s decision to shift away from the metaverse reflects a broader skepticism about the technology’s potential. While the metaverse has been touted as a potential game-changer, it remains to be seen whether it can deliver on its promises. At the same time, Meta’s increased focus on AI may position the company to create more immersive virtual experiences and more efficient advertising practices, making it better suited for the future of the digital world.