A tale of major marketing trends in two images:

The first is the sonic boom (and reverberations) of ChatGPT entering the public eye.

The second is Meta’s iOS 14-fueled bottoming-out in Q3 and Q4 2022 – and the recovery that came into sharp relief with July’s better-than-expected Q2 earnings call, which showed impressive year-over-year gains in revenue (11%) and ad impressions (34%).

What do ChatGPT’s splash and Meta’s recovery have in common? At the heart of each is AI – though Meta’s AI has been operating largely in the background while ChatGPT has sparked headlines and op-eds by the thousands. (Prior to that Q2 earnings call, Meta’s biggest 2023 headlines revolved around layoffs and Threads, a would-be alternative to X.)

ChatGPT and similar AI tools do indeed have many marketing uses – content, research, chatbots, creative, and light coding, to name a few – not to mention vast potential to do societal good and harm. Speaking strictly from a marketing perspective, though, what Meta’s investment in AI is doing for advertisers should have it squarely back in the spotlight by the time Q4 numbers roll in.

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Life after iOS 14

The blow in Facebook and Instagram conversion tracking inflicted by iOS 14, combined with privacy regulation and accelerating inflation that changed consumer spending behaviors, put Meta in uncharted territory in 2022 and early 2023, namely teetering revenue and mass layoffs. But well before iOS 14 debuted in 2021, Meta was investing in AI that was preparing for a world without cookie tracking or targeting based on personal data.

Today, Facebook’s Advantage+ shopping campaigns (powered by AI) are proving highly effective (and cost-effective) at finding valuable audiences for a range of objectives – including reach, which cookie-dependent, last-click-heavy advertisers have long undervalued. And Facebook’s Conversions API (CAPI) allows advertisers to bypass cookies altogether and collect information on web events from brand-side servers. Moreover, advertisers doubling down on efficiency and incrementality can take advantage of measurement studies like Performance Branding 3.0 to understand where their spend is creating the most impact. This is bringing a lot of advertising options back into scope, particularly for small Shopify businesses that struggled to spend effectively after iOS 14.

Google continues to kick the can down the road with cookie deprecation, now scheduled for 2024, even as GA4 directs advertisers toward an events-based world of measurement. Meta’s advertising suite, meanwhile, is all in on life after cookies. And it’s proving more adept by the day at finding, engaging, and converting users – and helping advertisers measure the value of its campaigns.

Impact beyond eCommerce

Q4 will be the ultimate proving ground for the effectiveness of Meta’s AI-powered products in eCommerce. Meanwhile, industries like lead gen and B2B are discovering significant improvements in lead quality and match rates thanks to Meta’s targeting advancements.

Pre-iOS 14, we rarely recommended Facebook as a viable platform outside of B2C and eCommerce, but that picture has changed for the better – especially for advertisers willing to spend to bring users into the funnel early in the purchase journey, even if they prefer to continue the conversation on higher-CPC platforms like LinkedIn.

What’s next

I expect that Meta’s ad revenue will follow its recent trajectory for Q3 and the all-important Q4 and that by late January, there will be all kinds of chatter about the company’s recovery. Meanwhile, competing platforms in the industry – notably, The Trade Desk – have invested in building similar AI-powered targeting capabilities that could soon change a longstanding narrative of shaky performance for programmatic advertising.

As for Threads, it – like ChatGPT – faded into the background a bit after some early buzz, so Mark Zuckerberg’s plans to roll out search and web functions are generating limited excitement. But I wouldn’t bet against Meta finding a way to use AI to enhance user experience and establish Threads as another layer in its advertising ecosystem – especially since they’ll likely have more runway to tinker as their bread-and-butter advertising revenue continues to improve. It’s a big if, but if Threads can eat into the X user base, Meta will have an ecosystem with strengths in connection (Facebook), trends and content creators (Instagram), and news and political discourse – and the ability to connect the dots of each interaction. That would be a walled garden with a whole lot of variety.

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