How Meta's using AI on Facebook and Instagram

Meta’s Head of Global Business Group Nicola Mendelsohn spoke with Yahoo Finance’s Allie Garfinkle at the 2023 Milken Institute Global Conference in Los Angeles. Mendelsohn discussed Meta’s latest earnings, the growth of Facebook’s global users, and how AI will play a role in the social media company’s future. ‘The community now is 3.8 billion people that are coming on every month, and 3 billion people are coming onto one of our platforms every single day. So that's the highest that we've ever seen,’ Mendelsohn told Garfinkle. That engagement drove Facebook and Meta’s (META) Q1 sales to $28.65 billion, up 3% from a year earlier and an increase after three straight periods of declining revenue. Mendelsohn said despite the increased competition Meta is very competitive in the advertising space. ‘What advertisers are telling me, and coming to me and talking about, is the fact that they see us as being absolutely key to helping their businesses grow and helping them reach the consumers that matter,’ she said. On AI, Mendelsohn said Meta is using it daily in a variety of ways including in newsfeeds, for ad targeting, and removing what it deems ‘harmful content.’ ‘We also use it to take off the platform any type of harmful content and misinformation. We're doing that through machine learning and AI.’

Key video moments:

00:00:25 Facebook’s growing reach

00:01:15 who’s winning ad wars

00:04:30 how Meta is using AI

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ALLIE GARFINKLE: We're here at Milken 2023. And I am here with Nicola Mendelsohn, head of Meta's Global Business Group. Nicola, thank you so much for joining us.

NICOLA MENDELSOHN: I'm so happy to be here. Thank you for having me

ALLIE GARFINKLE: So I want to start with Q1 earnings. You guys absolutely crushed it. What stood out to you?

NICOLA MENDELSOHN: There's so many things when I think back over the last quarter. But it's actually a result of all the hard work that all the teams have been putting in over the recent months. It particularly starts with the size of the community. So the community now is 3.8 billion people that are coming on every month. And 3 billion people are coming onto one of our platforms every single day. So that's the highest that we've ever seen.

And if I break down just some of those numbers a bit further and I think about something like Facebook in the US, you're now seeing 200 million people coming on every single day. That's the largest it's ever been. So I think it starts with the growth of the community. And then I think that's backed up, in turn, by how we're seeing the advertising revenues, which it's been our highest Q1 ever.

ALLIE GARFINKLE: And I want to actually hit on those advertising numbers because, across the sector, we saw Alphabet, Roku, Snap say digital advertising is still suffering. But Meta's cooking. So where does that gulf come from?

NICOLA MENDELSOHN: Look, there's still a lot of competition out there, right? And so we have to work really hard for every dollar, pound, euro, cent that is out there. But what advertisers are telling me and coming to me and talking about is the fact that they see us as being absolutely key to helping their businesses grow and helping them reach the consumers that matter.

And they want to know from us, what are the new products? And we've got a lot of new products that I'm really excited about that, I think, have in part contributed to that growth.

ALLIE GARFINKLE: And tell me, what are you hearing from advertisers right now? Because the narrative is that they've pulled back.

NICOLA MENDELSOHN: So what I'm hearing is that there's a stability out there when it comes to how they're seeing things now. So we've gone through a real period of real fluctuation, lots of changes that things couldn't have-- people couldn't have envisaged. But I think people are now more comfortable and confident in terms of what those uncertainties are. And they're factoring them in. So I think that's how we get to a period almost of normalization of the disruption and then more of a stable environment to be in.

ALLIE GARFINKLE: And then in terms of products that advertisers are excited about right now, what are some of those flagship products that you guys are really talking about?

NICOLA MENDELSOHN: Oh, we have a few. So I would be remiss if I didn't talk about Reels. It's one of our fastest-growing products. And what we saw just in the last handful of months was a doubling of the amount of Reels being shared every day to 2 billion Reels being shared. And that's people commenting and sharing and discussing and really enjoying the content that they're seeing.

And a lot of that's been powered by the investments that we've been making in artificial intelligence and machine learning. So that's one. That's a really exciting one.

The second one is around messaging. Messaging, and we have with WhatsApp and Instagram Direct and also Messenger as well, 3 really exciting messaging platforms for advertisers to be able to reach people in new and different and varied ways. And we're seeing that one of the products that we have that we call Click To actually enables advertisers to start a conversation in one of the individual threads. That now has a run rate of $10 billion.

Yeah, and I travel a lot with my role. It's a global role. And I've been in Brazil. I've been in Singapore. I've been in India. I've been in Korea. And it's been really interesting to see some of the use cases that we're seeing there with some of the large businesses and advertisers, one of which was JioMart, where they've basically built a whole supermarket with 20,000 SKUs right in WhatsApp where a person can go in, can pick the groceries, can arrange the delivery and the payment all within the individual thread and then, of course, do the same thing again next week.

So it's really exciting to see the growth of some of those products. And then finally, we are here at Milken. Everybody's talking about AI here, right? So we launched last August a whole suite of AI-powered products called our Advantage Plus products. And this is really helping advertisers to get the performance that they want with a reduction in the cost to actually reach the people that matter to them.

And these are different products that we've got across the way in which to reach people, the way in which to measure, and the types of creative the advertisers can put out there. And they do a number of different things. But ultimately, it's about giving that strong ROI and reducing the amount of manual steps that it takes for a person to put a campaign on our platform. So this is the beginning of a really exciting journey for us in this area.

ALLIE GARFINKLE: And how would you distill it down. If you had to, what Meta's role in the AI landscape really is right now?

NICOLA MENDELSOHN: So this is not a new area for us. I mean, we've been working with AI since really back to 2006 with the introduction of Feed. And we use it in three different ways. So we use it to surface and bubble up in the feeds the best content for you, that individual of those 3.8 billion people to see the things that matter most to you. So that's where we start.

We also use it to take away off the platform any type of harmful content, misinformation. We're doing that through machine learning and AI. And then finally from the advertising side and the monetization of our products, then it really is about making sure that we put the right products in front of the right people at the right time. So those are the different ways that we're using it today.

ALLIE GARFINKLE: And of course, cost-cutting has been a big story at Meta. So I was curious, given the layoffs, how are you feeling about the trajectory of the company?

NICOLA MENDELSOHN: Yeah, so look, layoffs are never an easy thing for any company to do. And we're seeing it right across-- well, not just the tech company, but across business per se at the moment. But in terms of how I feel about the company, I feel very excited. I feel very excited about the north star vision that Mark is putting out there, the bets that he's placing, everything from-- well, all the things that we've spoken about, but I would also be remiss if I didn't also talk about the worlds of AR and VR and the bets that we're placing to the metaverse.

I think there's very few CEOs that are bold enough and brave enough to put a bet on something that could be five and 10 years out. And so I feel very excited of how that community will move through the different phases that we've seen of digital to be where we are today to ultimately where we're all be in some type of virtual reality experience as well in the future also. So yeah, I feel very excited.

ALLIE GARFINKLE: This gets me to the second to last thing I wanted to ask you. Meta in five years, how will it be different, and why?

NICOLA MENDELSOHN: Wow, so that's such a hard thing to ask anybody in a tech company. I think five years back, could I imagine we'd be talking about the things that we're talking about now? Probably not, although the clues are in some of the things that I shared just at the end, which is I do feel very excited about the prospect of virtual reality and the impact it's going to have on our lives when it comes to all aspects of our lives, from how our children are going to be educated.

And it's been wonderful to see younger members of my family put on their-- and travel to places that they've never been to, having a deep sea dive experience, climbing Machu Picchu from the living room at home, right? I mean, I think that's amazing. And that's what we can do today.

I think about how it's going to change the way in which we collaborate and ideate in the world of work and then also in the way that people will be able to socialize. I think about things like pop concerts or football matches, always the preserve of the very few now being able to be opened up to so many more people to have those sorts of experience.

And of course, the whole environment, the new jobs that are going to be created for individuals, for creators, for people with followers, types of jobs that we cannot even imagine yet. And one of my favorite new jobs that I'm hearing about is--

ALLIE GARFINKLE: Do tell.

NICOLA MENDELSOHN: --is a digital avatar stylist. Now, we're seeing already that there are billion downloads of different--

ALLIE GARFINKLE: Is that a growth industry?

NICOLA MENDELSOHN: It's a new role. And again, who knew that that is? So that's what we already are seeing today. Who knows where those sorts of new jobs and opportunities are going to come in the future?

ALLIE GARFINKLE: And last question that I wanted to hit with you, on a personal note, you were diagnosed with cancer in 2016. 2019 you founded the Follicular Lymphoma Foundation. And then COVID hit. So I'm curious, what is your view on leadership in times of uncertainty that's coming from all sides?

NICOLA MENDELSOHN: Yeah, so thank you for giving me the opportunity to talk about that. And getting a diagnosis like that is just-- it's a real moment. And it's something that can rock not just you but your family and your friends around you. But I did set up a foundation. This is an incurable disease that I live with.

And I think what I've learned through all of this is to not be afraid to be vulnerable. If you're vulnerable, people will be vulnerable back. But I think it's also important to give people hope. I'm absolutely determined to find a cure for this cancer. And if there is anybody out there that wants to go on a journey with me on this, I've found people at Milken to be unbelievably helpful here.

And I am all in. And I want to hear from you. But I think it's about, yes, acknowledge the difficulties that you're in. But also make sure to paint the north star and the horizon of where you are going to get to. My horizon, I'm going to find a cure for this disease.

ALLIE GARFINKLE: Lady Nicola Mendelsohn, thank you so much for joining us.

NICOLA MENDELSOHN: Thank you for having me.