Meta’s Reels platform appears to be gaining on TikTok, generating 200 billion views across Facebook and Instagram.
That’s an increase over the 140 billion daily number CEO Mark Zuckerberg reported in Meta’s Q2 2023 earnings call. Zuckerberg estimates that the format’s annual run rate is $10 billion—setting it up nicely to compete with TikTok. TikTok pulled in about $9.9 billion in revenue for 2022, according to Insider Intelligence. They also project TikTok to reach $13.2 billion in ad revenue this year. Meanwhile, YouTube reported that its YouTube Shorts platform reached 50 billion daily views in 2023.
Meta attributes the growth of Reels to its innate understanding of its users through its use of algorithms. “We can show Reels that we think you’re interested in based on our discovery engines,” Justin Osofsky, Meta’s Head of Online Sales, Operations, and Partnerships told Reuters in a recent interview. The short-form video format has exploded in the last five years as TikTok has become the dominant social media platform among the 18-24 age cohort.
Meta’s focus on the Reels platform has certainly helped it explode its growth numbers. “People want to see more Reels,” Zuckerberg said in February 2023. “So the key to unlocking that is improving our monetization efficiencies, that way, we can show more Reels without losing increasing amounts of money,” he told investors during an earnings call.
Reels launched in 2020 as a TikTok competitor and has seen its usage double over the last year. Videos shared by users doubled at the beginning of 2023. Two billion Instagram users interact with Reels every month—making ad revenue from the format more important than ever for Meta. Meta launched a $1 billion creator fund in 2021 to help facilitate that explosive growth rate. Creators earned as much as $600 to $35,000 in bonuses during the launch of the program in 2021. However, those payments are down 70% by April 2022.
Advertisers also seem to prefer the Reels format over TikToks explosive virality. “TikTok is more volatile,” adds Monica Siegman, a Digital Marketing Strategist at Volume Nine, a Colorado marketing agency. “Some clients don’t have the resources to keep up with trends,” she adds, saying advertisers would rather focus money on a predictable platform for long-term growth.