Meta Will Target Ads Based On AI Chatbot Conversations

Core Insights - Meta Platforms is set to enhance its advertising strategy by targeting ads based on user interactions with its generative-AI-powered chatbot, which has over 1 billion active monthly users [3][4] - The new advertising approach will be implemented starting December 16, as part of a broader investment in AI infrastructure by CEO Mark Zuckerberg, who has committed to spending hundreds of billions on AI-related projects [2][4] - Despite the potential for increased revenue through improved advertising, there are challenges in using chatbot conversations for ad targeting, particularly regarding sensitive topics that will not be used for customization [5] Advertising Strategy - Advertising is the primary revenue source for Meta, with projections indicating that total revenue will reach $196.7 billion this year [4] - The company aims to leverage AI to enhance ad delivery and provide better tools for businesses, which Zuckerberg believes will yield returns on AI investments [4] Competitive Landscape - Meta's AI chatbot competes with offerings from Google and OpenAI, with ChatGPT achieving over 700 million weekly users since its launch [6] - OpenAI has recently introduced features allowing direct purchases within its chatbot, which some analysts view as a precursor to a potential advertising model [7] - Google has integrated ads within its AI features but has clarified that its Gemini chatbot currently does not use chat interactions for advertising [8] Stock Performance - Meta's stock has seen a decline of 2.5% recently, attributed to broader market reactions to the U.S. government shutdown and disappointing employment data [8] - Year-to-date, Meta shares are up 23%, but they have retreated approximately 10% from a peak of 796.25 reached in early August following strong Q2 results [9]