The rise of TikTok has been a significant concern for Meta CEO Mark Zuckerberg, prompting him to introduce a new service called Reels. According to a recent survey conducted by Morgan Stanley, Reels is starting to gain traction and pose a challenge to TikTok’s dominance in the social media landscape.
In April, Morgan Stanley conducted a study focused on tech adoption, surveying 2,000 individuals. The results revealed that 74% of Instagram users now utilize Reels, showing an increase from 69% in September 2022 and 62% in March of the same year. Similarly, on the main Facebook app, 65% of users engage with Reels, compared to 54% in September 2022 and 47% in March. This indicates a growing acceptance of Reels among social media users.
On the other hand, TikTok’s adoption has shown signs of plateauing. While 49% of the survey respondents reported using TikTok, the figures only saw a marginal increase from 47% in September 2022 and 45% in March of the previous year. Morgan Stanley analysts noted the significance of this trend, highlighting the competition emerging from other platforms.
Even Snapchat’s response to TikTok, known as Spotlight, is gaining momentum. The survey revealed that 60% of Snapchat users engage with Spotlight, up from 49% in September. This further demonstrates the shifting dynamics in the social media landscape.
TikTok’s rapid rise has posed a threat to Meta’s dominance, particularly among younger users. However, the growing acceptance of Reels is positive news for Meta and Zuckerberg. Morgan Stanley analysts believe that Meta’s emphasis on Reels’ increasing time spent and the potential for monetization through ad load and pricing will contribute to durable multi-year revenue growth.
In a nutshell, the Morgan Stanley survey indicates that Reels is making headway against TikTok, with a growing number of Instagram and Facebook users embracing the new service. The plateauing adoption of TikTok and the rising popularity of Spotlight on Snapchat further emphasize the evolving competition in the social media landscape.
Meta’s ability to drive revenue growth through Reels provides confidence in their long-term prospects.
