Meta’s Ad Sales Are Suffering Now That Europeans Can Pick Less Personalization
Meta’s advertising revenue growth in Europe slowed to 18 per cent in the three months to September, well below growth in the US and Canada. The figures matter because the slowdown followed the introduction of a less personalised ad option for EU users, which uses less personal data and may reduce the effectiveness of ads.
Meta has not directly attributed the deceleration to the new option, but its finance chief previously described it as a possible headwind, and an analyst said it was contributing to the slowdown. Meta says the option uses 90 per cent less data than personalised ads; the company was fined €200 million after EU regulators ruled its earlier choices did not meet Digital Markets Act requirements. Meta says it is working to improve ad performance and sees commercial potential in users’ product-related queries to its AI assistant, Muse.
In short
- Meta’s European ad growth slowed to 18 per cent.
- Less personalised ads may be contributing to the slowdown.
- Meta sees AI as a way to improve ad performance.
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The case for
The slowdown followed Meta’s introduction of a less personalised ad option, and using substantially less personal data could make ads less effective for advertisers. Meta’s finance chief had identified the option as a possible headwind, and an analyst said it was contributing to the deceleration, so the change is a plausible factor in the weaker European growth.
The case against
The figures do not establish that the new option caused the slowdown: Meta has not directly attributed the deceleration to it, and other factors could have affected regional ad growth. The less personalised option also responds to EU requirements after regulators found Meta’s previous choices fell short; the company says it is working to improve ad performance and sees commercial potential in product-related AI queries.
Explained simply
Meta runs Facebook and Instagram, which earn most of their money by selling advertising. Ads can be tailored using information about people’s interests and activity, making them more likely to be relevant to each viewer.
The European Union’s Digital Markets Act sets rules for large technology companies, including how they use personal data and offer people choices. Meta introduced an option for EU users to see ads based on less personal information; this may affect how well its adverts reach potential customers.
The issue matters because advertising is central to Meta’s business, while regulators are seeking to give people more control over their data. Meta is also exploring whether questions people ask its AI assistant, Muse, could help create commercial opportunities.
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