“And then after that, we should be able to profitably grow Reels while keeping up with the demand that we see.”

In context

“bottleneck that we are focused on to continue growing Reels is improving monetization efficiency or the revenue that’s generated per minute of Reels watched. Currently, the monetization efficiency of Reels is much less than Feed. So the more that Reels grows, even though it adds engagement to the system overall, it takes some time away from Feed and we actually lose money. But people want to see more Reels though. So the key to unlocking that is improving our monetization efficiencies that way we can show more Reels without losing increasing amounts of money. We are making progress here and our monetization efficiency on Facebook has doubled in the past 6 months. In terms of the revenue headwind, we are still on track to be roughly neutral by the end of this year or maybe early next year. And then after that, we should be able to profitably grow Reels while keeping up with the demand that we see. In our broader ads business, we are continuing to invest in AI and we are seeing our efforts pay off here. In the last quarter, advertisers saw over 20% more conversions than in the year before. And combined with the decline in cost per acquisition, this has resulted in higher returns on ad spend. We continue to be excited about the monetization opportunity with Business Messaging, too. Facebook and Instagram are the first two pillars of our business. And in the next few years, we hope to bring Messaging Online as the next pillar. One way of doing this is click-to-message ads, which is now the $10 billion run-rate. And paid messaging is the other piece of this. We are earlier here, but we continue to onboard more businesses to the WhatsApp Business Platform where they can answer customer”