Meta’s ‘year of efficiency’ brings lofty AI ambitions — and more mass layoffs

2023/03/20 Innoverview Read

Meta Platforms this week unveiled its latest blueprint on the quest toward its self-labeled “year of efficiency,” which includes eliminating an additional 10,000 jobs — a staggering addition to its 11,000 layoffs in November — and doubling down on lofty artificial intelligence (AI) ambitions.

In a company announcement sent to Meta employees on Tuesday, chief executive Mark Zuckerberg detailed a restructuring plan that sees the company ditching low-priority projects and flattening its hierarchy, noting that an additional 5,000 open jobs will not be filled. As the Facebook and Instagram owner looks to right its path amid ongoing struggles, Zuckerberg pointed to AI as its next big break, a message present in several communications from the company as of late. 

“Our single largest investment is in advancing AI and building it into every one of our products. We have the infrastructure to do this at unprecedented scale and I think the experiences it enables will be amazing,” the chief executive said in the notice.

An enhanced focus on AI arrives just a few weeks after Zuckerberg posted to Facebook with a more detailed outline of how Meta plans to enhance its experiences with the tech. Initially, the company will pull together teams that are already working on generative AI to form one group focused on more rapidly advancing work in the area, per statement details. In the short-term, Meta plans to build creative and expressive tools, with the longer-term goal revolving around developing AI personas. Conversations around AI have gained new interest following the buzz surrounding OpenAI’s ChatGPT (and now GPT-4), with others in the social media ecosystem, including Snapchat, also vying for a share of the hype.

“AI is the right pivot for Meta, albeit a bit surprising that they haven’t been making heavy investments there already,” said Arthur Fullerton, chief technology officer at agency Formerly Known As, in emailed comments. “If you consider the opportunities leveraging generative AI in the myriad of chat clients Meta owns (WhatsApp, Messenger, Instagram DM), there is a viable opportunity to enhance the user experience, ultimately impacting business results positively.”

Heavy bets on the buzzy tech comes as Meta continues to struggle. The company for the past three consecutive quarters has faced revenue declines, most recently seeing a 4% year-over-year drop in the fourth quarter to $32.2 billion and laying off 13% of its staff during the same period. However, Facebook reached 2 billion daily active users during the quarter, which Zuckerberg attributed partially to AI within its ads business. The move is similar to others in Big Tech, including Google’s Alphabet, that are also touting AI as the solution to ongoing woes. 

But as Meta turns the corner with a sharper focus on AI, it appears to be at the expense of some of the energy and excitement once reserved for the metaverse, according to Jay Pattisall, vice president and principal analyst at Forrester, noting that the offering has been slow to gain traction. Meta often exudes all-in behavior before reshuffling its priorities, as evidenced by its recent pullback from NFTs, but the company continues to double down on the potential of the metaverse in its company updates. 

“Part of this I think is a recognition that [the metaverse] is a much slower burning emerging technology opportunity and that AI is moving at a faster clip in this stage,” said Pattisall.

AI ambitions are ‘not a new focus’ 

Though AI appears to be a new focus for Meta, the company has made it a point to reassure advertisers that it’s nothing new. A February release from Meta serves to boast the success of its AI capabilities within its ads business, noting that advertisers in Q4 of 2022 saw over 20% more conversions year-over-year, a jump it credits to the tech. Flexing its muscle in the space — and its potential to save marketers money amid an ongoing spending slowdown — could help boost advertiser sentiment as it looks to test new waters. 

“AI is not a new focus for Meta. We’ve applied AI and machine learning to our ads ranking system to show ads to the right people for many years now,” the Feb. 28 statement reads.

Among highlights, the company pointed to its Advantage suite of automated business tools, particularly its Advantage+ shopping campaigns, which allow marketers to identify business objectives, budget, advertising creative and target countries and turn the remainder of the work over to AI. According to findings cited by Meta, 32% of advertisers using Advantage+ shopping campaigns have seen a stronger return on ad spend. 

Additionally, it highlighted AI-powered creative enhancement capabilities available through its Advantage+ suite, which can automatically apply small changes, like adjusted brightness and text placement, to ad offerings. The recently launched tool has delivered 14% more incremental purchases per dollar spent for advertisements that utilize it, the company found. Currently, over 10 million businesses use personalized ads on its platforms.

As adoption of AI becomes more commonplace, Meta’s proof of payoffs from its investments will continue to be critical as the company elevates the tech as a focal point, according to Mike Proulx, vice president and research director at Forrester, adding that AI itself won’t be enough.

“As AI has suddenly come into vogue, it’s clear Meta wants its due credit for the work it continues to do in the space — but AI by itself isn’t going to save Meta,” Proulx said in emailed comments. “How AI manifests itself into enhancing the experience of Meta’s product portfolio in the short-term needs to be demonstrated.”

(Copyright: MarketingDive Meta’s ‘year of efficiency’ brings lofty AI ambitions — and more mass layoffs | Marketing Dive)