While Meta has made investments in tools that have helped it mitigate the damage from platform-side privacy changes, those are being offset by economic conditions hitting the amount advertisers are spending on the company’s platforms.

Revenue was down by 4% year-over-year in the three months ended Sept. 30, with net income down 52%. Excluding the impacts of exchange rates, revenue was up 2%, but CEO Mark Zuckerberg said in a call with investors after markets closed Wednesday that rate was still behind where he’d like it be.

Zuckerberg was also keen on the company’s user growth, which included 2.93 billion daily active users and 3.71 billion monthly active users across its family of apps. However, average revenue per user was $7.53, down from $7.91 in the previous quarter and from $8.18 in the same period last year.

Facebook’s daily active users hit 1.98 billion – an all time high for the platform, with particular growth in North America. Zuckerberg added in the call that Instagram has over two billion monthly active users, while WhatsApp has over two billion daily active users.

CFO Dave Wehner said in the investor call that while the company has now lapped the launch of iOS 14.5, making the ATT cross-app tracking changes have less of an impact on growth, that was offset by weak advertiser demand in a challenging economic environment.

Wehner added that while Meta saw positive growth from healthcare and travel advertisers, that was offset by ecommerce, gaming, financial services and CPG advertisers softening their ad spend. He added that revenue from large advertisers “remains challenged,” though smaller advertisers have been more resilient.

While ATT isn’t impacting growth figures, Meta’s chief business officer Marne Levine said the company is continuing to work on “rebuilding” its ad tech to improve measurement and performance, with heavy investments in AI, machine learning and products like click-to-message and lead ads that help improve on-site conversions.

The other thing Meta emphasized with investors is its ongoing plans to grow Reels, a short-form video format on both Facebook and Instagram that the company hopes will help it compete with TikTok. While some users have complained about the Reels UI, and the fact that it feels forced upon them, the company reported further growth in the format, with a 50% growth in the number of plays over the last six months.

In addition to further improved the recommendation engine in Reels, as well as better integrating the content with posts from those users actually follow, Zuckerberg said another priority was improving monetization of the format. Currently, time spend on Reels displaces revenue from other sources, due to a lower ad load.

Featured image by user Nokia612 on Wikimedia Commons.