Since 2020, Reels has been Meta’s copycat response to TikTok’s burgeoning global success with short videos. And though Meta CEO Mark Zuckerberg would most likely be more than happy to focus solely on developing his so-called metaverse, Reels may become his last resort for relevance.
A year after rolling Reels out on Facebook, Meta recently announced testing of several creator-centric advertising changes to its TikTok competitor:
But here’s the most important piece of this announcement: Eligible creators will receive 55% of the revenue from these new ad formats––a desperate move to persuade creators to stay on a platform now notorious for aging up alongside its user base.
While it’s debatable whether or not these updates will improve users’ Reels experiences, Insider mentioned that this move is a necessary step toward balancing user experience with monetization.
But how effective has Reels been for brands?
A new study conducted by social performance and creative agency Nest Commerce looked at global Meta data from over 40 ecommerce brands, with 79% of prospecting campaigns generating a total of 984 million impressions across Q3.
Nest found that while Reels spending soars, engagement is low. Reels was Meta’s largest growing format in Q3, with spend increasing by an astonishing 750% between Q2 and Q3.
While Reels ads remain cheaper than non-Reels, the two-year-old format is proving more difficult to drive engagement through, with average click-through rates being 387% lower for Reels, and cost per click 71% higher.
“Driven by TikTok’s huge impact, Meta continues to invest in short-form video, and brands are developing more sophisticated strategies,” says Nest’s CEO of commerce Will Ashton. “As audience behavior changes, we are now seeing conversion rates on Facebook and Instagram approaching parity with static ads.While engagement rates on Reels are lower than other formats, Meta is investing heavily in the format, so this is likely to improve over time.”
Ashton believes that creative remains the best tool advertisers have for optimizing performance on Reels. “Investments in ad-spend efficiency here will quickly pay off in higher return on investment,” he adds. “As we approach peak season, brands should test different creatives to stand out from the pack, with a focus on quality messaging in a tougher economic climate.”
With short-form video monetization becoming the inevitable war zone for social media’s biggest players, it’s possible that whoever can best figure out how to provide direct creator monetization and an easily accessible format for brands will ultimately win.