Meta says time spent on Instagram grew 24% thanks to TikTok-style AI Reel recommendations

Meta shared some updated engagement info around its platforms on its Q1 2023 quarterly earnings call on Wednesday, with Meta CFO Susan Li joining CEO and founder Mark Zuckerberg to field questions from analysts about its results. Zuckerberg shared that time spent on Instagram has grown more than 24% since the company launched Reels on the platform thanks to AI-powered content recommendations — aka, the kind of non-connection recommended videos that TikTok basically built its entire brand upon.

“We’re very pleased with what we’ve seen Reels drive in terms of incremental engagement on the platform so far,” Li said later in response to an analyst question, adding that “it’s clear that people value short-term video” on the platform. She further clarified that Instagram is also seeing a lot more sharing around Reels in recent months.

“We’re seeing the sharing flywheel take off with Reels re-shares, with re-shares doubling over the last six months,” she said.

Li seemed to shy away from an analyst question regarding whether Reels was having a similar impact on Facebook proper, but did repeatedly note that on FB, AI-driven recommendations that don’t come from direct connections are increasing engagement among users.

While Reels and AI recommendations are driving more engagement on Instagram, that’s not yet directly translating to more revenue. In fact, Li acknowledged that Reels are actually cannabalizing some revenue from Stories and feed-based posed, since they’re accounting for some of the time users would’ve spent engaging with that content. The larger trend is incremental however, meaning overall user time is going up, which Li said will eventually be a positive point for revenue potential. She said Reels is on track to be revenue-neutral by end of year, or early 2024, and looked ahead to positive contributions sometime after that. She did point out that there will be product work in figuring out proper monetization for Reels, since they’re “structurally different” from existing Instagram content types.

“We don’t have line of sight to getting Reels to monetization parity with feed or Stories per time because of those structural differences,” but because it’s driving incremental growth, she said they’re confident they will eventually become a key contributor to monetization.