Meta goes all in

May 01, 2025

Welcome to a Thursday update from Unmade. Today: In a frenetic week for Meta, the company held its first Australian Upfronts-style event yesterday. It’s all-in on AI, and then some.

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The Metaverse expands again

It's been a week of thinking about Meta even more than usual.

On Monday, the Australian Financial Review published the company’s local 2024 financials, as filed with ASIC.

Meta paid $44m in tax on direct local revenue of $1.46bn. Thanks to offshoring much of its billing via Ireland, chances are that Meta’s real local revenues across Facebook, Whatsapp and Instagram are north of $5bn. Thanks to recharges from its parent company, the company only reported a local profit of $47m

The same day, my colleague Hal Crawford and I grabbed a 20-minute podcast chat with Meta’s ANZ MD Will Easton. We uploaded that Mumbrellacast interview last night.

Meta’s APAC boss Dan Neary kicked off the afternoon

This week also saw the release of Meta AI as a standalone app.

Screen showing the Meta AI toggle function

The topical reason for the podcast interview was yesterday’s Meta Festival. There were no limitations beyond time on what we could ask in the short interview, so we were able to raise issues such as tax, intellectual property piracy, age-gating, and the News Media Bargaining Code. The answers were of course well rehearsed, but as you’ll hear, at least we got them on the record.

And this morning came Meta’s global quarterly results update, the most profitable first quarter in the company’s history. US$41bn in advertising revenue, and a profit of $17.5bn.

And the company isn’t just a tax minimiser in Australia, it revealed (proudly, I think) it paid an effective tax rate of just 9% globally. That’s down from 13% the same time a year ago, and 22% in the same quarter of 2023. Good for shareholders; bad for public services around the world.

But the main focus of the earnings call, and at Meta Festival, was AI. As APAC boss Dan Nearly told the Meta Festival audience, the company is “all in” on AI. The main business reason quickly became clear. If advertisers can be persuaded that Meta’s AI is delivering better results, they will shift even more spend in that direction.

This is the closest Meta has come to an Upfronts event in Australia. I’d estimate 700 people were in the room.

The composition of guests was slightly different. Glancing at name badges, my impression was that marketers was the single biggest cohort. Although they were there, there were proportionally fewer media agency people than I’m used to seeing at an Upfronts event.

And that was by design. Meta is racing to build a world where its AI-driven advertising platform does pretty much everything a media agency used to. Neary extolled the fact that its Advantage Plus ads service reduces the workflow from 11 steps to just two.

And founder Mark Zuckerberg had more to say on today’s earnings call: “The first opportunity is improved advertising. Our goal is to make it so any business can basically tell us what objective they're trying to achieve - like selling something or getting a new customer - and how much they're willing to pay for each result, and then we just do the rest.
“Businesses used to have to generate their own ad creative and define what audiences they wanted to reach. But AI has already made us better at targeting and finding the audiences that will be interested in their product than many businesses are themselves, and that keeps improving.”

At yesterday’s event, Meta was at pains to argue that AI won’t remove the central role of creative agencies in building out big ideas; it’s merely a tool. They put Saatchi & Saatchi chief creative officer Mandie van der Merwe on stage to help make that point.

It’s a tool that will require far fewer creative agency personnel to deliver the content, though.

I was more persuaded by a LinkedIn post from the UK yesterday. Former creative Alastaire Allday wrote:

“I dunno about you, but my LinkedIn feed is full of creative people out of work. Many of them with years of experience, awards, classic ads under their belt. They're talking redundancies. Talking about how quiet it is out there. Wondering where all the freelance work went.
“Listen to the anger and you will hear some people blaming AI. Others will talk about the disguised recession we've been in since the cost of living crisis, with some sectors - like advertising - more affected than others. After all, it's easier to cut marketing spend than close a factory.
“It's not a slump.
“It won't pick up next year.
“Your job is gone and it isn't coming back.”

And Zuck inadvertently made a similar point in this morning’s update:

“And now AI is generating better creative options for many businesses as well. I think this is really redefining what advertising is into an AI agent that delivers measurable business results at scale. If we deliver on this vision, then over the coming years I think the increased productivity from AI will make advertising a meaningfully larger share of global GDP than it is today.”

Having eaten publishers’ breakfasts, Meta is gobbling up media agencies’ lunches, and now wants creative agencies’ dinner.

Not that the outcome of all of the ad dollars ending up within Meta’s walled garden is inevitable.

Meta isn’t the only global platform in the ecosystem. Much of the competitive tension comes from Google, and the pureplay AI platforms. Anything Meta and Google can do, OpenAI will be able to do soon enough.

Australian Association of National Advertisers CEO Josh Faulks made a bold prediction at the opening today’s Reset conference: “AI will fundamentally shift how consumers, stream, search and shop. ChatGPT will take over Google search in four years. Many say this will happen earlier. The key insight here is consumers are already and increasingly using AI to search.”

I say bold not because I disagree, but because Google was one of the event sponsors.

If you want the macro story of where media is at right now, check out Mumbrella’s current home page: