Meta released their quarterly earnings, and something isn’t adding up.
1. The Price Per Ad is down 17% year over year. This is the fifth quarter in a row that the Price Per Ad has dropped.
2. Ad Impressions are the number of times your ads were displayed to your target audience. Impressions aren't counted if it is detected they came from bots. More are up 26% year over year.
3. Meta monthly active users are up about 5% year over year.
The combination of a big increase in ad impressions and continued drop in ad costs typically indicates an increase in inventory. In most cases, inventory increases because of an increase in user growth or time spent.
But, user growth has grown nearly enough to account for these other changes. And Meta doesn’t release time spent numbers anymore, but we can assume those aren’t up drastically. What else could explain it?
Well, it could be that users are now getting shown far more ads than a year ago. That’s not necessarily a good thing.
If the number of ads shown is increasing, that will likely result in more noise, a negative impact to user experience, and less effective ads. Users will tune them out.
Or maybe there’s another explanation. What else may cause this?