Europe's 18% Ad Growth Lags US 33% Amid Meta's Privacy Shift
Advertising growth in Europe decelerated significantly after Meta introduced privacy-focused ad options, lagging behind figures from the US and Canada.
Key points
- European ad revenue grew 18 percent year-on-year, a slowdown from previous quarters.
- Growth in the US and Canada reached 33 percent, outpacing the European market.
- Meta does not disclose how many users selected the less personalized advertising option.
Meta’s advertising revenue in Europe slowed during the three months leading up to September, underperforming compared to the company’s global results. The company reported this deceleration on Wednesday, noting that the region’s growth rate fell behind figures from other markets. This trend follows the introduction of new privacy controls that allow users to opt out of data-heavy advertising models.
In plain English
The slowdown occurred after Meta began offering a choice for European users to see fewer personalized ads. Previously, the company used extensive user data to target advertisements, which typically generated higher returns for advertisers. The new option limits the data used for targeting, resulting in less efficient ad delivery and more ads being closed due to irrelevance or repetition.
The background
EU regulators ruled that Meta violated the Digital Markets Act by failing to provide an equivalent service that uses less personal data. This decision resulted in a €200 million fine for the company. In response, Meta introduced the Less Personalized Ads model at the beginning of this year, allowing users to choose between personalized and non-personalized advertising experiences on Facebook and Instagram.
What changes now
Advertising growth in Europe dropped from around 40 percent to 24 percent in the preceding two quarters before settling at 18 percent. In contrast, growth in the US and Canada accelerated from 31 percent to 33 percent. Analysts attribute the European slowdown to the reduced efficiency of less personalized ads, which leads to fewer transactions and more ad closures due to irrelevance.
Key terms explained
Teams usually monitor how privacy regulations impact user engagement and revenue streams. Check whether your organization relies on targeted advertising for income, as reduced data access can lower conversion rates. Understand that less personalized ads rely on contextual cues rather than individual user history, which often results in broader but less precise audience reach. This shift requires adjusting expectations for return on investment and may necessitate alternative marketing strategies to maintain profitability in regulated markets.
What to do and how to stay safe: Meta
- Review your organization’s reliance on targeted advertising in regions with strict privacy laws.
- Monitor changes in ad performance metrics to assess the impact of reduced data access.
- Prepare alternative marketing strategies that do not depend on personalized user data.
- Stay informed about regulatory updates that may affect advertising practices in your market.
General security guidance from the Vector Update newsroom. It is not confirmed advice from the organisations named in this story.
Frequently asked questions
Why did Meta’s ad revenue slow down in Europe?
The slowdown is attributed to the introduction of Less Personalized Ads, which use less user data and result in lower efficiency for advertisers.
How much did European ad revenue grow compared to the US and Canada?
European ad revenue grew 18 percent year-on-year, while the US and Canada saw 33 percent growth.
Did Meta disclose how many users chose the less personalized ads option?
No, Meta does not disclose how many people have chosen each advertising option.
