Meta’s Ad Sales Are Suffering Now That Europeans Can Pick Less Personalization
Meta's advertising growth in Europe decelerated to 18% year-on-year in the three months through September, lagging behind the 33% growth seen in the US and Canada.
The slowdown in Europe comes after Meta began offering Instagram and Facebook users the Less Personalized Ads (LPA) option earlier this year. This followed EU regulators ruling that Meta was breaching its Digital Markets Act obligations and imposing a €200 million fine.
Meta's CFO Susan Li had previously warned investors about the impact of less personalized ads in Europe, calling it "an additional headwind" during the company's second quarter results call in July.
Data Usage Impact
LPA uses 90% less data than personalized ads, showing users ads based only on their current session activity plus basic information like age, location, and gender. Meta has warned that less-personalized ads lead to poorer returns for advertisers.
We believe the EU's free, personalized advertising option is contributing to the European slowdown.
Future Strategies
Despite the challenges, Meta is working to improve ad targeting efficiency. Li told investors the company has "a lot of runway" to increase ad conversions through enhancements to its recommendation engine.
The company is also exploring how its new personal AI agent, Muse, launched last month, could eventually tap into the advertising market. Li noted high commercial intent from users seeking product recommendations through the service.
Related
