Meta, Facebook’s parent company, has made a big bet on AI. But it faced a significant drop in the value of its shares. Shares plunged 15%. This movement, attributed to uncertainty about when investments in AI will pay off, triggered a wave of sales in the technology market, causing shares of other companies, such as Microsoft, Alphabet and Snap, to fall between 2% and 5%. Pressure on investors increased after Mark Zuckerberg, CEO of Meta, predicted that costs would grow “significantly” in the coming years. The estimate is that the company’s expenses will rise to a level of US$35 to US$40 billion in 2024.
Rising costs and strategic challenges from investing in AI
Zuckerberg’s announcement raised concerns among investors, who fear that Meta may be embarking on another expensive venture, as was the case with the metaverse. The high cost of the virtual reality project has already caused billions of dollars in losses. The investment in AI, however, aims to keep Meta competitive in relation to other giants such as OpenAI and Microsoft. The company needs to invest heavily in data centers and product development to position itself ahead in the AI market.
AI-Powered Engagement and Revenue Outlook
Despite forecasting lower revenues in the second quarter of 2024, Meta is confident in the returns from its bet on AI. Analysts highlight the growing engagement on Instagram, the Meta AI virtual assistant and the initial versions of Llama 3, a language model that promises to innovate user interaction. So, this reinforces the belief that AI can bring valuable returns to the company.
New AI-based tools are hope
In addition to the challenges faced, Meta invests in new resources such as Advantage+. This set of advanced tools powered by artificial intelligence promises to optimize advertising campaigns on Facebook. Designed to help advertisers find new opportunities and improve performance, Advantage+ automates tasks that previously required manual adjustments.
Custom audience targeting: Advantage+’s artificial intelligence analyzes target audience behavior and engagement patterns to define the best targeting strategies. This ensures that ads reach the right people at the right time.
Automated creativity: The feature identifies the most effective creative variations, automatically adjusting campaigns based on which ads get the best results. Thus, this reduces the time spent on manually optimizing different creatives and improves return on investment (ROI).
Simplified reporting: Furthermore, the platform offers intuitive and detailed reports, allowing advertisers to easily understand the performance of their campaigns. Additionally, it allows them to identify areas for improvement and adjust their strategies as needed.
Budget Maximization: Advantage+ optimizes budget allocation between different ad groups, ensuring that every dollar invested is used effectively to drive conversions.
In short, Facebook Advantage+ reflects Meta’s vision to make digital advertising more efficient and data-driven, even amid the financial challenges it faces. The company believes that tools like this can be fundamental to maintaining competitiveness and strengthening the advertising ecosystem in a world increasingly driven by AI. However, the question remains: who will pay this bill?
Analysts divided on the bet on AI
Analysts are divided on Meta’s future: 17 have lowered their stock target prices, while eight have raised them. The average price target is now $525, reflecting uncertainty about investment returns. There is a consensus that spending on AI is necessary, but the timing and effectiveness of these investments is still a concern, especially given the slower growth of the digital market.
Meta is committed to investing in AI, despite the significant challenges it needs to face to balance costs and return expectations. Therefore, the investment in AI must be gradual and meticulous, to ensure that the products offered bring the desired results. Advantage+ is an example of how the company plans to innovate in digital advertising, enabling advertisers to reach more targeted audiences and create high-performance campaigns. And, in addition, it is a bet to recover your investments. Although the challenges are great, Meta believes that its long-term vision in AI will ensure a competitive future in the digital market.
( fonte: bruna oliveira/ digital agro)
