The latest string of moves from Meta suggests a tech giant scrambling to adjust a new reality.
It’s common for platforms to regularly update features, but less so for big players to make changes to features that affect key business lines and revenue. And yet, Meta appears to be actively engaged in reshaping its future and current commerce business.
If nothing else, the changes underscore how pivotal Instagram has become to the tech giant. The company expanded shopping features on Instagram, with new purchasing capabilities that allow users to buy products directly through chat, but narrowed commerce features on Facebook, which will be stripped of live shopping as of Oct. 1.
How much the moves will affect brands remains to be seen. But those effects will likely vary anyway, according to Jen Jones, chief marketing officer of Commercetools, a software company for e-commerce that works with major brands and retailers such as Sephora, Ulta Beauty, H&M and others.
“The majority of our clients are either big retailers selling directly to customers or brands that are really focusing on a direct-to-consumer strategy,” she told WWD. “I think an announcement like this from Meta really isn’t going to impact them as much. [But its ad business] does, I think, tend to play with some of these smaller companies, brands and retailers.”
It’s also not clear what its choice to cut live shopping, at least on Facebook, will mean in the long run. The e-commerce trend is enormously popular in Asia, and it was forecasted to reach $35 billion in U.S. sales by 2024. And yet, even TikTok seemed to back off of it, reportedly scaling back plans in the U.S. and Europe last month. Now Meta is stepping back.
But the move may be less about the success of livestream shopping than the desire to propel Reels, the short video format on Facebook and Instagram that Meta has been touting as a potentially large revenue driver.
If it wants to narrow its video options and nudge the attention to Reels, it’s not necessarily a death knell for the format, either.
“If you think about Meta and TikTok, even, and the consumer behavior there, I think that’s a little different than maybe sitting on a livestream where you’re focused for a longer amount of time, like on YouTube,” Jones explained. She’s also seen great success on owned channels, like brands’ websites. For instance, she sees Sephora doing quite well with its own livestreams.
Such moves matter in the Meta universe, but perhaps not as much for its long-term vision, which is wholly focused on all things metaverse. In that domain, the company was particularly busy last week.
Meta broadened its NFT rollout on Instagram to more than 100 countries across Africa, the Asia-Pacific region, the Middle East and the Americas. It also revealed that it will add new support for wallets from Coinbase and Dapper Labs, owner of NBA Top Shot, along with the Flow blockchain.
A lynchpin for cryptocurrency transactions, Crypto wallets hold the private keys necessary to access the coins and, often, the NFTs its owner buys. In a minor but oddball footnote, chief executive officer Mark Zuckerberg also released one of his old Little League baseball cards as an NFT showing the little tech tycoon-to-be up to bat.
Quirky, yes. Noteworthy? Also yes. Because Meta may have set its course for the metaverse when it changed its name and mission last year, but it appears to be hitting the gas pedal on the whole affair now.
Anyone who’s surprised hasn’t been paying attention. Zuckerberg himself has often acknowledged that this next, “embodied” iteration of the internet may take as long as a decade to arrive. Others peg up to 20 years. And what’s become increasingly clear is that Meta can hardly afford to wait that long.
The social media-cum-metaverse giant made history earlier this year for the greatest loss in market value for a U.S. company, hemorrhaging more than $230 billion. It followed that up by reporting the first revenue loss in its history as a public company in the last quarter, driving shares down more than 50 percent.
Some investors and analysts still aren’t keen about its new metaverse goals, but that’s not the main reason. Heightened competition from TikTok and ongoing challenges from Apple’s privacy update, which thwarts ad-targeting, blends with market forces, changing user behaviors and other factors were, apparently, a killer combination. It all led to Meta taking on debt by launching its first bond sale in recent days.
Altogether, it looks like the business that advertising built is on shakier ground. That’s a problem, because it seemed that the company was depending on its social media platforms, with its advertising and related commerce efforts, to bring in the money and stability while it focuses on its larger and more costly ambitions within crypto, the metaverse and NFT initiatives. For now, that looks like anything but a certainty.