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Meta is set to initiate a testing phase for advertisements within its Threads microblogging application, focusing on select companies in the United States and Japan, as outlined in a blog post published on Friday.
This initiative marks Meta’s first attempt at monetizing Threads, a platform launched in July 2023 to compete with X (formerly known as Twitter), which was acquired by Elon Musk for $44 billion at the end of 2022.
Adam Mosseri, the head of Instagram and the Meta executive who oversees Threads, stated that the company will carefully monitor this initial test before considering a broader rollout. “The goal is to integrate ads into Threads in a way that is as engaging as the organic content,” he noted in a post shared on the service, which can be found here.
During the testing phase, a limited number of users will encounter advertisements featuring large images in their feeds, resembling the sponsored content typical of Facebook and Instagram, according to the blog post. Companies participating in this test will also utilize a brand-safety tool, ensuring that sponsored content doesn’t appear alongside offensive posts, similar to tools available on Meta’s other platforms.
Meta has emphasized that its existing monetization policies will govern Threads, which means that any content violating Community Standards will not be eligible for ad placement. Currently, Threads boasts over 300 million monthly users, and the company claims that approximately 75% of them follow at least one business.
A $5 billion market
Since its debut, some investors have speculated that Threads could become a significant revenue channel for Meta, potentially rivaling Twitter’s earnings before Musk’s takeover. In 2021, Twitter generated approximately $5 billion in revenue.
During a discussion with analysts in October, Meta’s Chief Financial Officer Susan Li acknowledged the platform’s growth but tempered expectations for immediate revenue generation. “We do not anticipate Threads will be a substantial revenue contributor by 2025,” she remarked during the company’s third-quarter earnings call.
In upcoming months, Meta plans to provide additional updates regarding third-party advertising verification tools and the inclusion of more languages.
The timing of the Threads advertisement announcement coincides with Meta’s recent decision to relax its content-moderation policies and discontinue its third-party fact-checking program, a move aimed at promoting greater “free expression” on the platform.
This development follows a notable shift in the social media landscape spurred by Apple and Google, which halted TikTok’s distribution via their app stores. This action is part of compliance with a law signed by former President Joe Biden in April 2024 that requires TikTok’s parent company, ByteDance, to divest in order to avoid a potential ban in the United States.
“The introduction of ads on Threads shortly after Meta’s content moderation changes is likely to capture the attention of advertisers,” commented Jasmine Enberg, a principal analyst at eMarketer. “With uncertainty surrounding TikTok, brands are looking for alternatives, and Meta aims to seize this moment to promote Threads as a viable option.”
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