Meta Q1 2024 report hints at performance problems

The Q1 2024 earnings report for Meta blew past expectations. However, some of the numbers hint at performance woes under the hood.

Takeaways

• Meta’s Q1 2024 earnings report exceeded expectations on many metrics, but revealed potential performance issues.
• The numbers suggest that users are encountering more ads and marketers are paying more for them.
• This is a good reminder for marketers to diversify their channel mix and not overly depend on a single platform.
• Despite a strong Q1 performance, Meta’s stock dropped due to concerns over its significant investments in AI.

Meta’s latest earnings report

While Meta’s earnings report for Q1 2024 outperformed on practically every metric – ad impressions were up 20% YoY, daily active users increased 7% YoY, and average ad price increased 6% YoY. This is a very rosy picture for stockholders. Despite that, Meta’s stock still tumbled due to concerns about Meta’s heavy investment in AI without the expectation of much return for years to come.

Performance concerns

While the numbers above look great for stockholders, savvy marketers likely saw some red flags. Given the fact that ad impressions grew significantly, but user growth grew only nominally (along with ad prices), the numbers indicate that Meta users are being spammed with more ads and those ads are costing more.

This may not be a surprise to those who have been keeping a close eye on the performance of their channel mix, though – we at Upptic have noticed a decline in the quality of Facebook as a performance channel for a while. This is an important reminder to continue and diversify your channel mix and not rely too heavily on any single performance channel.