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Behind the Numbers: an EMARKETER Podcast
The Big 3 Questions For Meta — AI Video, Conversations As Data, and Smart Glasses | Behind the Numbers
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A
In the rapidly evolving world of retail media, few platforms are as uniquely positioned as Digi Media Network. With more than 20,000 stores, Dollar General serves as a lifeline for over 90 million shoppers across the US at a time when all shoppers are looking to save money. DG Media Network Media built better hey gang. It's Monday, November 17th. Mindy and listeners, welcome to behind the Numbers, a new market video podcast made possible by DG Media Network. I'm Marcus. Join me for today's conversation. We have two New York based folks. We start with our senior analyst covering social, Minda Smiley.
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B
Hey, Marcus. Happy to be here.
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A
Hello there. Welcome to the show. And also we have with us analyst extraordinaire Emmy Lederman.
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C
Thank you for that introduction. Pretty much happy to be here.
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A
Or not enough.
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B
Oh, just.
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C
Just right. Just right.
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A
Thank you, Goldilocks. Anyway, today's fact. How many people have ever lived? Okay, this might not be interesting. I'm now noticing in real time.
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B
That's just how many people have ever lived. That's the question. Period.
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A
Yeah, we'll see how this goes. According estimates from the population reference bureau, 117 billion.
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B
Oh wow.
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A
117 billion. This means that the current global population of 8 billion represents 7% of people. Sorry, sorry. 7% of the total number of people who have ever lived on Earth.
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C
Crazy.
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A
Doesn't seem right. It's just busier now. That's basically what this is saying.
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B
Collecting life data that just feels.
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A
This is from the Population Reference Bureau. Do you question my sources, Minda? But these are definitely estimates. It's hard. It's hard to track. They haven't been keeping censuses since, I don't know, this whole time. But in the year, it's just. There's more people now is the thing. In the year 1000, the entire world had roughly as many people as the United States has now. So imagine all the people in the US right now spread across the whole world. It sounds nice. It sounds more peaceful is what it sounds like. But you could also carry a sword everywhere back then. So maybe not Pros and cons.
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C
You can't do that now.
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A
Yeah, swings around, as the British would say. Anyway, that was a car crash. Today's real topic, the big three questions for meta. Every quarter we look at how the big tech players are getting on, or at least we will be from now into the future. And we will be asking this question, what are the three biggest questions surrounding said company? In this case, meta right now. So we're going to discuss my ranked list. My Top three. And then Minder and Emmy will tell us at the end what they might change, if anything. So the first question, I think the biggest question for Meta right now, I think is how will AI generated social video affect social media? So an article by Jeff Brumfiel of NPR is titled Kiss Reality Goodbye, AI Generated Social Media Has Arrived. OpenAI, he notes, just debuted Sora 2, a short form AI video generator with social media features. Users can scroll AI videos forever or use a small text based prompt window in the app to make their own. Solomon Messing, associate professor at NYU and the center for Social Media and Politics, says just what effect of a social media world driven entirely by AI remains unclear. Minda, I'll start with you. What do we think? How will AI generated social media affect social media?
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B
I personally think it's way overhyped right now for a few reasons. Um, I think one, I mean, I do think a lot of these, these kind of videos are going to have a shelf life. I think once, once some of the shininess wears off, there won't be as much of an appeal to like just watch purely AI created video. And we're already seeing other social platforms like, grapple with the issues with this. I mean, Pinterest has had to like already introduce features to, to turn, to let users kind of like turn down the AI slop, essentially. So, like, I just don't think the demand is as big as some people seem to think. And I also think when you look at the actual numbers, I'm going to pull one up. As of mid October, Meta AI had about 2.7 million daily active users. And that was after Vibes was introduced to Meta. That's still like a draw. I mean, that is significant growth when you think about the fact that it is a newer app and that Vibes clearly added a surge of downloads to Meta AI. But like, that's still not that many people when you compare to Instagram and Facebook. And I'm aware that it's not a fair comparison. Instagram and Facebook have been around for much longer, but like, again, it is when you think about just like the whole landscape and how much attention Sora and Vibes has gotten. Like, I don't think that many actual people are interested in these types of videos and want these types of videos. I'm very curious what you both think, but that's my take.
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A
Vibes, just for context, Meta's own AI video app, which just launched. Yeah, Emmy, what do you think?
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C
Yeah, I think when we started seeing very obviously AI generated content on Instagram, and a lot of it was like croissants turning into golden retrievers and just ridiculous things like that. I think there was a novelty to it and people were intrigued by it. But I kind of think that novelty is going to wear off because I think there is going to be this appetite for content that is clearly not AI generated and kind of this, like, fatigue around it. I saw an interesting stat from the company, Billion Dollar Boy, that said in November 2023, 60% of consumers preferred Geni Gen AI creator content, which dropped to 26% in July. So I think that there was this initial interest and the hype is really wearing off and people just prefer content that has that human touch because they're getting a little bit scared of this AI slop and the fact that we're losing that connection that kind of makes creator marketing valuable.
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B
Yeah, there's also like, we're kind of seeing this, like, divergence where, like, there's all this interest in these AI videos. But then when you look at the other side, look what the other trends show. People are really interested in premium episodic series, like content on social media. Like, people want to see stuff that. That does feel like there's. There was some thought put into it that someone made this, that someone had some sort of roadmap, like. So I. That's really telling too. And that's something I feel like we're not really seeing people talk about is like people are craving a more premium experience when they're. When they're watching stuff on social. And I think a lot of these AI videos are like the complete opposite of that. So.
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A
Yeah, yeah.
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C
And I think people are craving more premium and episodic experiences, but I also think they're craving imperfect content. I was talking to a creator recently who went to this Adobe conference where they were talking a lot about their AI features. And they have one feature where it pretty much allows you to edit your content. So if you completely misspoke or mispronounce something, it would edit it as if, you know, that didn't happen. And he was talking about how back in the day, before I really took off, people were very focused on getting every single detail perfect and like reshooting things, re recording things when they misspoke. And now it's almost less important because there is this need to kind of virtue signal and show people I have this imperfect content and I'm not completely leaning into AI.
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A
Yeah, I've always thought that, you know, when you go on stage and you have to give a speech or something and presentation. Making a mistake just humanizes you. I always, I'm always excited the first time I make a mistake. So I'm like, okay, I got out the way. And anytime I see someone do it on stage, I always think, okay, they're human and I can just relate to them so much more. I think it does make your content even better when people can see that, you know, it's not perfect because nothing is my take here. I don't think it's going to go away as fast as you guys. I don't think it's something that people are going to move past as quickly, maybe eventually, but I don't think it's quickly. And one of the reasons is because I thought deepfakes were a bad thing and but maybe there's been a kind of redefinition of them. The definition I looked up is deepfakes. They're an an image or recording that has been convincingly altered and manipulated to misrepresent someone as doing or saying something that was not actually done. So that's some dictionary. Merriam Webster, in case you're wondering which one. But that before Sora 2 and Vibes came out, deepfakes used to be, you know, a bad word. Bobby Allen of NPR noting OpenAI has essentially rebranded deepfakes as light hearted playthings. And then Daisy Soderberg Rivkin, a former trust and safety manager at TikTok says, quote, it's as if deepfakes got a publicist and a distribution deal. It's an amplification of something that has been scary for a while but now has a whole new platform. So I wonder if we've reframed deepfakes and they are going to be more socially acceptable and for that reason people might start using them or continue to use them for longer.
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C
I think that's a really interesting framing of deepfakes getting this PR makeover. And this example is on a kind of different scale, but I kind of connect this to a bunch of new features across social platforms that we've seen in the past where they were really cool and interesting and innovative at first and then they kind of just lost their sparkle over the years. I think a lot of Snapchat filters is a great example. I remember when Snapchat first started introducing filters and you could have that one where you open your mouth and a rainbow comes out of it. And I was in high school when that happened and everyone was losing their minds over this and then quickly it just kind of got stale and people were less impressed by it. So I think to some degree I understand that AI is going to advance and be able to seem realer and maybe be more innovative than the video content we're seeing now. And I don't know the exact timeline of when people will get sick of it, but I do think that it's going to happen. And then there's also those, a lot of these, like environmental concerns and people are like, why are you turning your cat into a human being? And like wasting all this energy. So I think there's a segment of the population that feels that way as well.
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A
It might happen, I think, when there are some big kind of scandalous videos that go viral. There was one, I believe it was in Germany, a politician, where there was a fake video of her basically pulling out of the campaign. And so I think when these videos have significant ramifications, then people might start to say, okay, this is too much, I don't want to be a part of this. I thought it was really good line from Brian Walsh of Vox. He was saying, really, it's almost unfair to hold a tech company to its mission statement. But OpenAI, the creator of Sora 2, you are pushing it. With its latest product release, the AI generated video social network Sora 2 OpenAI may have set an all time record for greatest distance between mission statement and actual work. So I'm a little bit surprised that they decided to release this product, but I think it's one of the biggest, yeah, I think it's one of the biggest conversations surrounding OpenAI and Meta because they play in the social media space. So that's my number one, my number two, Meta using AI chatbot conversations to target ads so Ina Frieda Axios noting that like OpenAI, as Minda just mentioned, Meta has introduced its own AI video app called Vibes. A Reuters piece Experience explains that Messa platform said it would begin using people's interactions with its Gen AI tools to personalize content and ads across its app starting from December 16th. Users can't opt out. According to TechCrunch. One example of this would be if you were talking about hiking on Facebook or Instagram and then Meta AI would later show you hiking groups, friends, trail updates or ads for boots. Hiking boots. For example, conversations involving religious or political views, sexual orientation, health and racial or ethnic origin won't be used to customize ads or content. The rollout doesn't include the eu, uk, South Korea because they have stricter privacy laws. Emmy, what's your biggest takeaway regarding Meta using AI Chatbot Conversations to target ads.
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C
Well, I think the people that are already using these AI features are pretty leaned in and excited about AI as a concept. So I don't think that from a privacy standpoint, AI or meta using these AI chatbot conversations to inform the types of ads people are getting is going to change their attitude around it. If anything, I think they'll say, like, this is. I'm getting a better and, like, more personalized experience around AI. And I think a lot of. We've seen a lot of research, especially for younger generations. They don't love the way that AI has its hands in, like, creative work, but they're way more interested in the role that AI plays in shopping recommendations, for example, example. So I think that they are bought into AI helping with, like, from a commerce standpoint and an advertising standpoint. So I only really see this as, like, a positive advancement for meta.
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A
Okay. Minda.
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B
I had a few, few takeaways. My first was, I thought it was really interesting when they said conversations involving religious, sexual orientation, racial, you know, that whole thing, like, they're saying that's not going to be part of how they customize ads. And I was sort of like, I mean, what. Like, who's to say what constitutes religious conversation? Like, you know, I know they have all these tools and stuff, but that's something that I certainly made me sort of raise my eyebrows and think, if that's something you are concerned about, like, if you don't want those more personal or sensitive topics, you know, I wouldn't. I think there's. That's. That's a huge gray area. And I feel like how they're going to moderate that. There's sort of a lot of questions there. So that was my one, sort of my one takeaway and my second kind of going into what Emmy was saying. Like, people already assume all these social networks are, like, tracking us all the time. I mean, people are convinced that our phones listen to us every day and hear all of our conversations. I mean, just last month, I think Instagram's head had to come out being like, I promise we're not listening to you. No one believes them. It's just like, it sounds so dystopian to say, but I think people are like, people think that they're tracking so much of us all the time. So I don't think that's really, like, shocked many people to hear them come out and say this, frankly.
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C
Yeah, I don't think meta necessarily or at all deserves a gold star for the ways in which they've protected people's privacy. Like they're kind of giving consumers no reason to believe that they will actually follow through with protecting privacy. And there's such a gray area, as Minda was saying, like how do you define and kind of weave or separate or like weave out what is considered a conversation about your identity and what isn't? Like it just doesn't really feel like that's how human beings operate.
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A
Yeah.
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So I think no one is believing those words.
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It's a lot of extra data. Meta AI now has 1 billion MAUs monthly active users across the company's family of apps. So it's going to be a lot of extra information about folks that they can use in different ways for content, for ads. We'll see. That's my second question. Big question for Meta. My third is do Meta's new smart glasses really have a future? So back in September, Meta unveiled some new smart glasses which have been a hit for the company, writes Eli Tan of the New York Times. He explains that there are three new types of glasses. The first one, Meta Ray ban display for 800 bucks. Tiny screen in this lens to show apps you can share media to Instagram, play music through built in speakers. The apps and the glasses will be controlled by a wristband. It also has voice based AI assistant that can talk through speakers and see through the camera. Second pair is an upgraded version of its existing ray bans for 379 bucks and the third pair costs 500 and are meant for sportswear. They're being made by Oakley Minda. Do Meta's new smart glasses really have a future?
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B
Yeah, it's a really interesting question. This is an area I've been paying more and more attention to. One thing I always kind of say when I'm talking to people is like, I kind of like a litmus test I use in my own life is like when people outside of our industry start talking about something is when I know like okay, this might be becoming a thing. And so one of my friends recently, she does not work in like marketing. She, her company actually sent her a pair of like the Meta Ray Bans and she was saying how she was like wearing them while she walked her dog and she liked them more than she thought she would. And I was like, okay, this is like super interesting and kind of like again got me paying a little more close attention. So I do think, like to my point, I do think they have more momentum than they ever have, but I still think it's incredibly niche and I still think they have so Many challenges along the way. I mean, even like the stumbles that happened recently with Zuckerberg kind of like demoing the new glasses on stage. I don't know how closely some people have followed this, but it didn't go well. And so that's a challenge. And then there are just some bigger challenges around. You know, if, if this is a product people actually really want. I mean, even, like, this sounds silly to even say, but, like, I think there are some people out there that, like, just don't want to wear glasses. I. I'm one of them. I actually have to wear glasses because I, I can't wear contacts. It's a whole boring story. But, like, I hate having them on. I took them off for this podcast. Like, I don't like having that feeling of something in my face. And I do think it's a growing and more interesting part of the. Part of their business, but I think there's a long way to go.
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A
Yeah. Emmy. I'm really struggling to figure out whether this is going to be a big deal or is absolutely nothing, because Mr. Tanford times writing, as I just quoted, he was saying, Meta's smart glasses have been a hit for the company. However, in another article written by himself and his colleague Brian X, Chairman Times, they note that as of February, Meta had sold about 2 million of its $300 Ray Ban Meta camera glasses since their 2023 debut. And they hope to sell 10 million annually by the end of next year. That's a tiny amount for a company this size. They know. So I can't figure out if this is significant or not, these investments that they're making in smart glasses.
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C
So this is a hard question because I think that the product aligns with a lot of what consumers want right now because they want to be off their phones and kind of like touching grass and connecting with the world. And in a strange way, wearing smart glasses, I think allows them to do that more than not. Because, you know, if you're at a concert, you can pay attention to what's happening, happening on stage without, like, holding your phone in the air. Like, I do think there's a lot of benefits for content creators. I would say more so. But I think that it has a serious branding issue because we know that Gen Z really shops based on their values and they are truly not a fan of Zuckerberg to any degree. I don't know if you guys saw this. I think happened last week at the Music Innovator Awards. Billie Eilish was kind of going on about billionaires being unethical and said it in front of Mark Zuckerberg and was like, you need to be giving some of your money away. Like, what are you guys doing? Kind of in a lighthearted way. But it went viral and I think that's really telling of how people feel about him and Meta as a business. And I also don't think Oakley and Ray Ban are like, particularly cool brands in this day and age. So I think that in order for this product to work, it needs a makeover in terms of, like, who is behind it.
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A
That syncs up with one of the questions I had, which was, are low sales of these glasses for Meta a referendum on Meta or on smart glasses? Because that New York Times article was pointing out that, quote, if smart glasses do eventually become mainstream, the product might come from a brand that has a better reputation with consumers. Close quote. Exactly, Emmy, to what you were saying. All right.
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B
I also think they kind of have like a distribution, I mean, distribution issue. Like I said, my friend who's using them, they were sent for free by her company. She didn't go out and buy them.
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A
All right, so my top three big questions for Meta at the moment. How will AI generated social video affect social media? The second one is about Meta using AI chatbot conversations to target ads. And the third is, do Meta's new smart glasses really have a future? Minda, I'll start with you. What did I miss?
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B
What did you miss?
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A
Or should these be rearranged?
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B
I would say maybe the one other thing I would have chatted about was more just like broadening the AI bit for Meta in terms of obviously, we know that AI has really helped their business, it's helped their algorithm. So it's helped keep people on the app longer by, you know, surfacing more relevant content, helped advertisers better target users. So we're seeing like, how AI is paying off now, but I think there are these kind of longer term questions around, like, what's going to be the thing that really gets, like, the users excited about AI, not just the advertisers? Because, yeah, that's like a big existential question I think that they're facing right now.
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A
Yeah, that's a good one. We didn't cover the earnings too much here. But Meta, which makes pretty much all of its money from advertising, grew revenue 26% in Q3. That's its fastest quarterly growth in the last six quarters. So very impressive. And that's the Q3 was their first $50 billion quarter, which is also a bit of a milestone. Emmy, how about for you?
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C
I think that advertisers are happy with the results that they're getting from Meta, but at the same time they don't like the lack of transparency, which has always been a case with the case with like paid social. But I think increasingly Meta is just promising results and not necessarily telling these advertisers how they're getting there. And I think that that is a short term solution. But when these advertisers are figuring out how they want to move their budgets, what their kind of bigger, broader marketing strategy is, they're going to face more issues if they're kind of just like chasing the cheaper results in the dollars in the short term. So I wonder how that's going to play out.
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A
Yeah, that's a good addition as well. That's what we've got time for for today's episode. Thank you so much to my guests for hanging out with me today to discuss the big three questions of the moment surrounding Meta. Thank you. First to Minda.
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B
Yeah, thank you.
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And of course to Emmy.
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C
Thank you so much for having me.
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A
Yes, indeed. And thank you to the whole production crew and to everyone for listening to behind the Numbers New Market video podcast made possible my DG Media Network. Subscribe and follow to make sure you know when we have new episodes out. Leave a rating and review to help support the show if you can. Suzy will be here on Wednesday with another episode of Reimagining Retail.