TikTok on the Mind

It’s not hard to see why Facebook parent Meta Platforms (FB) is paying such close attention to rival TikTok. While Facebook’s user base recently stopped growing for the first time, TikTok is the new kid on the block. It reached one billion global users last year and has only had formal ads since 2020.

During its February earnings call with analysts, Meta mentioned TikTok nearly a half dozen times. The competition between the two companies is intense, and clearly has Meta rethinking some aspects of its social media approach. In order for Facebook and its Instagram platform to remain dominant, it plans to borrow from what is driving TikTok’s success.

Keeping It Reel

Meta CEO Mark Zuckerberg has identified the company’s short-form video product, Reels, as priority number one in 2022. Reels was first launched in 2020 across the globe on Instagram, and made its way to Facebook earlier this year. Executives say it’s already Meta’s fastest-growing content format.

Broadly speaking, Reels are similar to the bulk of content that’s created on TikTok. Meta defines them as short and entertaining videos where users encounter new ideas, collaborate with others, and discover cultural trends. The company isn’t loading Reels up with ads yet, as compared with Instagram Stories or Feed posts.

Can Meta Reel in The Ad Dollars

There are signs Reels can boost Meta’s revenue, as Stories ads are now achieving the same level of monetization as Feed ads. Stories grew out of a desire to compete with Snapchat (SNAP) and were launched in 2013.

Now, Meta is hoping to attract content creators onto its platforms by offering a revenue share program for Reels. Some analysts argue there’s no guarantee that will work, because many creators get paid off direct sponsorships rather than revenue-share agreements. Meta is betting short-form videos are the key to driving engagement, and it hopes Reels can tackle TikTok.

Things are changing daily within the financial world. Sign up for the SoFi Daily Newsletter to get the latest news updates in your inbox every weekday.

Sign up

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Adviser
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.
SOSS22040503

The post Meta Tries To Beat TikTok at Its Own Short-Form Video Game appeared first on SoFi.