Is tiktok’s time up? As the social-media app’s chief executive, Shou Zi Chew, prepares for a grilling before Congress on March 23rd, TikTok’s 100m-plus users in America fret that their government is preparing to ban the Chinese-owned platform on security fears. Their anguish contrasts with utter glee in Silicon Valley, where home-grown social-media firms would love to be rid of their popular rival.
TikTok’s success has prompted its rivals to reinvent themselves. Meta, which owns Facebook and Instagram, has turned both apps’ main feeds into algorithmically sorted “discovery engines” and launched Reels, a TikTok clone bolted onto Facebook and Instagram. Similar lookalike products have been created by YouTube , Snapchat , Pinterest and even Netflix .
Meta points out that it has been here before. Instagram’s Stories feature took a while to get advertisers signed up but is now a big earner. Meta is ramping up Reels’ monetisation and expects it to stop losing money around the end of this year. But it acknowledges that it will be a long time before Reels is as profitable as the old news feed.
Auctions for video ads are less competitive than those for static ones, because many advertisers have yet to create ads in video format. Big advertisers prize video ads . But the long tail of small businesses from which social networks have made their billions find video spots tricky to produce. Just over 40% of Meta’s 10m or so advertisers use Reels ads, the company says. Getting the remaining 60% to create video commercials may be made easier by artificial intelligence.
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