Meta-owned social platform Threads may soon enter the advertising game as it seeks to capitalise further on X’s rapidly declining ad revenue.
Threads was launched in July last year as a speculated targeted attack on its longtime competitor, X (formerly Twitter), capitalising on the platform’s long-reported struggles after it was taken over by Elon Musk in 2022. The platform looks almost identical to X, with likes, followers, and a feed of posts based on user interactions, and now has more than 175 million monthly users.
With X’s ad revenue down by an estimated 45 per cent in 2023 and advertisers rapidly pulling back after Musk’s takeover, Meta could be at the forefront of a golden opportunity to commoditise on the wealth of advertisers looking for an alternative platform. Threads ads would offer an alternative place for businesses to spend their marketing budgets, especially for those already familiar with Meta’s successful suite of ad products on Instagram and Facebook.
Adam Mosseri, head of Instagram, who has notably worked across the development of Threads, said in an interview last month that he wants to see ads in Threads sooner rather than later. “It’s just really a question of opportunity cost. Is that the best way to drive business versus making Instagram ads a little bit better on any given month? But it’ll happen, and hopefully sooner rather than later”.
While Mosseri said Threads plans to sell more targeted and personalised ads than X has historically offered, the move could still threaten Musk’s business given how successful Meta’s advertising business has become. Meta’s USD $135 billion in sales last year — the vast majority from ads — was nearly 40 times X’s estimated revenue. Further to this, in the fourth quarter of 2023, ad impressions delivered across Meta’s family of apps increased by 21 per cent year-over-year. For the full year 2023, ad impressions increased by 28 per cent year-over-year, and the average price per ad decreased by 9 per cent year-over-year.
Recently launching a slew of features that have attracted celebrities, journalists, and politicians, Threads is positioning itself as a hub for breaking news—a title once held by Twitter.
Among the new features is an API that will let developers build third-party apps for Threads and allow sites to publish directly to the platform. Threads developer Jesse Chan announced the update in a post on the social platform back in March. The API will let users “authenticate, publish threads, and fetch the content they posted through these tools,” he said.
Post by @0xjesselView on Threads
The social platform is also reportedly testing its own version of TweetDeck, a feature that was once popular with Twitter users allowing them see several content feeds on one screen. Threads users in the test group can pin as many as 100 feeds to their homepage, making it easy to jump between posts from people you follow, posts recommended by the company’s algorithms, or feeds focused on specific keywords or topics.
When Meta chief executive officer Mark Zuckerberg launched Threads last July, he said that he hoped the service would eventually reach a billion users. “There should be a public conversations app with one billion-plus people on it,” Zuckerberg wrote in a post on Threads after its launch. “Twitter has had the opportunity to do this but hasn’t nailed it. Hopefully we will”.
B&T contacted Meta for comment on how the changes would impact Australia. The social network said that they had nothing further to add at this stage.
