Mark Zuckerberg's Meta Platforms Inc. (NASDAQ:META) is reportedly planning to introduce ads on its Threads platform in early 2025 as Elon Musk's X is losing favor with major brands.
What Happened: Meta is set to allow a limited number of advertisers to create and publish ads on Threads starting January 2024, reported The Information, citing people familiar with the matter.
While the exact format of advertisements on Threads is yet to be revealed, they could potentially appear as "sponsored" posts. Meta aims to capitalize on the app's swift expansion, according to the report. Data compiled by Statista shows that Threads' monthly active users stood at 175 million at the end of the June 2024 quarter, up from 150 million in the quarter before.
This move aligns with previous reports about the company's plans to monetize the platform. Instagram head Adam Mosseri confirmed earlier that the company is "definitely" planning to bring ads to Threads.
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Why It Matters: Musk's social media platform and Threads' rival X has been facing a backlash from advertisers due to concerns over explicit content and free speech issues.
In September, a report by analytics group Kantar revealed a significant decrease in marketers' trust in X as an advertising platform since its acquisition by Musk, with a predicted 26% decline in ad spending on X for 2025.
However, earlier this week, it was reported by the Financial Times that some advertisers are considering a return to X to curry favor with Musk and President-Elect Donald Trump.
Meanwhile, last month Meta reported its third-quarter earnings, which showed a revenue beat and a 5% increase in daily activities.
During the earnings, the tech giant revealed that it generated $39.8 billion in advertising revenue over the past three months, accounting for 97% of its total revenue.
However, Meta CFO Susan Li stated that the company does not anticipate Threads to be a significant revenue driver in 2025.