Meta struggled in Q2 as the global economy and platform privacy changes continue to hit its ad revenue, but the company remains committed to video for future growth.

Revenue at Meta was down 1% year-over-year, the first time the company has reported a quarterly revenue decline. In the U.S and Canada, ad revenues were down 4.3%.

Daily active users across Meta’s family of apps was 2.88 in Q2, flat from last quarter but up slightly from 2.76 in the same period a year ago. There were 3.65 monthly active users, again flat from last quarter but up from 3.51 in Q2 2021.

Average revenue per user was $7.91 USD, down from $8.36. Ad impressions across apps increased by 15% year-over-year, while the average price per ad decreased by 14%.

In an earnings call, CEO Mark Zuckerberg pointed to two familiar factors for the revenue decline.

The first was an economic downturn that is impacting digital ad spending and has also hurt the earnings at other ad-supported social media companies. This is resulting in Meta “doing more with fewer resources,” including reducing headcount.

The second factor was ongoing challenges from Apple’s iOS 14 privacy changes, which continue to impact its ad targeting and measurement capabilities. To that end, the company is continuing to bet on features that allows users to interact directly with businesses within Meta’s family of apps – and give the company a better understanding of a user’s interests – as well as AI features that allow it to do more with less data.

Costs and expenses rose by 22.5% year-over-year, including a 42.5% increase in research and development.

In addition to speaking about the company’s continued commitment to the metaverse, Zuckerberg also spoke about the company’s push towards short-form video on Facebook and Instagram.

There was a 30% increase in engagement with its Reels content format across the two platforms. He added that AI-recommended content from people users don’t follow will make up about 30% or more of users’ feeds by the end of 2023, compared to roughly 15% now.

The push behind Reels is despite the fact that, according to Zuckerberg, Reels still do not monetize at the same rate as content in Stories or Feed, but the company is keeping up its commitment because it believes it is better for the company long-term.

This is also despite the fact that many users have been vocal in their distaste for the changes Instagram has implemented in its push for short-form video, including pushing Reels as a default format, suggesting content from creators a user doesn’t follow, a higher ad load and testing a TikTok-like full-screen interface. Some of the criticism has come from some Instagram’s most-followed creators and personalities, including Kim Kardashian and Kylie Jenner.

Earlier this week, head of Instagram Adam Mosseri posted a video acknowledging users’ frustrations and that the changes are “not good” yet, but reiterating that video would become more prominent on the platform regardless and the company would be working to “get better.”