• by Colin Kirkland , November 14, 2024

This coming January, Meta may be planning to allow a small number of advertisers to create and publish ads on its decentralized microblogging app Threads, marking a first for the platform and following through with its long-term goals.

Since the X-competitor app officially launched in 2023, quickly amassing millions of users due to its integration with Instagram, brands have patiently awaited the ability to advertise on the platform, especially as X became a more volatile and unreliable space to target specific audiences after Elon Musk took over in 2022.

After major ad partners fled X to an onslaught of harmful content appearing alongside their ads, Meta has had an opportunity to provide advertisers with a potentially more brand-safe environment to run promotions on an app that was designed to give users a similar, yet less contentious, experience as they may have had on X.

Last spring, Instagram head Adam Mosseri stated that Meta would “definitely plan to bring ads to Threads,” adding that the app needs “to make enough money to pay for the people and servers that it takes to run the service and provide it to people for free.”

Mosseri's point aligns with Meta's overall business model, which relies on advertising for the majority of its revenue.

Last quarter, for example, the company said that it earned $39.8 billion in ad revenue, or 97% of its overall revenue, in the previous three months.

And now, it seems that the time for Threads ads has arrived, according to a recent report by The Information, which suggests that Meta is looking to introduce ads on the app early next year. 

However, Meta has not officially confirmed or denied the report. Instead, a company spokesperson said the company's “priority is to build consumer value first and foremost,” but that “there are no ads or monetization features currently on Threads.”

The statement is consistent with Meta CFO Susan Li’s comment in the company's most recent earnings call: “We don't expect Threads to be a meaningful driver of 2025 revenue at this time. We’ve been pleased with the growth trajectory, and again, we're really focused on introducing features that the community finds valuable and working to deepen growth and engagement.”

If advertisers are able to run ads on Threads early next year, it will be an experiment with uncertain results due to the newness of the platform and its integration with Instagram.

Another notable factor involves Threads’ ongoing competition with X, which may see a boost in ad revenue as some major brands return to win the favor of Musk and president-elect Donald Trump, according to a report by The Financial Times.

These factors are leading some advertisers to believe that despite its recent growth, Threads’ adoption of ads will not have a major effect on ad-spend share.

"Since Threads doesn't offer much of a new user base for advertisers, I don't see the introduction of ads on the platform leading to a significant shift in share of ad spending,” Justin Jefferson, director of analytics at Keen Decision Systems, tells Media Daily News. 

“The majority of Threads traffic results from Instagram, so there's minimal reason that brands can't capture those same users on Instagram ads,” Jefferson adds. “In the best-case scenario for Threads, they could offer ridiculously cheap CPMs and attract smaller 'test budgets,' but even then, I don't see it growing to any substantial size.”