Meta’s Threads will soon include ads in the U.S. and Japan

The move may take advantage of volatility in the social media industry, given X’s issues and questions about TikTok’s future

Author of the article:

Bloomberg News

Kurt Wagner and Riley Griffin

Published Jan 24, 2025  •  2 minute read

Meta has been enthusiastic about growth prospects for Threads, increasing its user base in the U.S. and Japan, which are among its key markets. Photo by Richard Drew/The Canadian Press

Meta Platforms Inc. will show advertising on social network Threads for the first time, opening up a new revenue stream for the company and increasing competition for Elon Musk’s X.

Article content

Article content

The ads will come from a “handful of brands” and appear only in the United States and Japan to start, according to a post Friday from Instagram boss Adam Mosseri, who called the move a “test.”

Article content

Meta will be “closely monitoring this test before scaling it more broadly, with the goal of getting ads on Threads to a place where they are as interesting as organic content,” Mosseri wrote on the platform.

The company’s Instagram team launched Threads, a clone of Musk’s X, in mid-2023 after Musk bought the social network formerly known as Twitter in October 2022 and struggled to maintain its advertisers. Meta has teased the idea of bringing ads to Threads for months, but held off to focus on expanding the network’s user base. As of December, Threads had 300 million monthly users, and more than 100 million daily users, chief executive Mark Zuckerberg said at the time.

It’s not clear what the revenue potential for Threads will be long-term, but the service will benefit from Meta’s existing pool of advertisers and its ability to hyper-target messages to specific consumers. Twitter never succeeded in building the kind of massive advertising business Meta has achieved with Facebook and Instagram. At its peak in 2021, Twitter revenue was US$5.1 billion. Meta’s global revenue in 2024 is estimated to be about US$163 billion, so Threads will likely be a small part of the company’s business for some time.

Article content

The move may take advantage of volatility in the social media industry, given X’s issues and questions about TikTok’s future, said Jasmine Enberg, an analyst at Emarkerter. Still, Meta’s recent decision to abandon content moderation in the US may cause some hesitancy among advertisers, she said.

“The timing will likely be questionable for many brands, who may no longer view Threads as a safer alternative to X,” Enberg said. “Many users are also already skeptical about Meta, and the launch of ads on Threads is likely to elicit backlash.”

Meta has been enthusiastic about growth prospects for Threads. Its user base has been increasing, particularly in the U.S. and Japan, which are among its key markets, chief financial officer Susan Li told investors during an earnings call in October.

Recommended from Editorial

1. 

   Meta to spend as much as $65 billion on AI

2. 

   Meta to cut five per cent of staff, targeting low performers

3. 

   Meta refuses to publicly release info on news blocking

Earlier on Friday, Zuckerberg said in a Facebook post that Meta would invest as much as US$65 billion on artificial intelligence-related projects in 2025. Projected capital expenditures for this year are more than double the capital expenditures in 2023. Meta is scheduled to release fourth-quarter results on Jan. 29.

Meta shares gained 1.9 per cent to US$648.54 at 1:30 p.m. Friday in New York. The stock had gained 65 per cent in the past 12 months through Thursday’s close.

Bloomberg.com

Article content