Meta’s ad revenue jumps 26% to $63.1 billion as AI boosts conversions, ad prices

Meta Platforms reported a 26% year-on-year increase in advertising revenue to $63.1 billion in the third quarter of 2026, as higher ad impressions, rising average prices and AI-led improvements in advertising performance strengthened the Facebook and Instagram parent's core business.

The company said ad impressions across its Family of Apps increased 10% during the quarter ended September 30, while the global average price per ad rose 14% compared with the corresponding period last year.

Speaking during Meta's third-quarter earnings call on October 21, Chief Financial Officer Susan Li attributed the increase in average ad prices to improved advertising performance and better macroeconomic conditions compared with the year-ago quarter.

Impression growth, meanwhile, was supported by higher engagement, user growth and advertising load optimisation across Meta's platforms.

The numbers underline how Meta is expanding advertising revenue through both greater ad delivery and improved monetisation, with average ad-price growth outpacing the increase in impressions.

Total company revenue stood at $64.6 billion, up 26% year-on-year, with advertising continuing to account for the overwhelming majority of Meta's business.

AI delivers measurable advertising gains

Beyond revenue growth, Meta disclosed several improvements in advertising conversions linked to its AI-powered recommendation and ranking systems.

The company's Meta Generative Recommender, which uses large language models to match advertising content with user preferences, was introduced to generative retrieval on Facebook Feed during the quarter. According to Li, the rollout drove a nearly 2% increase in conversions across targeted segments.

Meta also expanded its GEM advertising ranking model to additional placements, generating a 1.7% increase in conversions for offsite conversion campaigns and a 9.6% increase in app advertising conversions.

Improvements to its Andromeda advertising retrieval system contributed to a further 1.4% increase in conversions on Facebook, the company said.

Meta is also pushing AI deeper into campaign management. Li said advertisers adopting recommendations from Meta AI Business Assistant generated almost 5% more conversions at the same cost per conversion and increased advertising investment by 9% compared with similar advertisers who had not adopted the recommendations.

The figures are based on Meta's reported performance measurements and refer to specific products, campaign types or advertiser groups, rather than an overall improvement across every advertiser using its platforms.

Nearly 10 million advertisers use AI creative tools

AI adoption is also expanding on the creative side of Meta's advertising business.

During Q3, nearly 10 million advertisers used at least one of Meta's generative AI advertising creative tools, the company disclosed.

Adoption of its video generation features grew 25% quarter-on-quarter, supported partly by tools that allow advertisers to generate videos within seconds from a single uploaded image.

The developments suggest that Meta is increasingly integrating AI across the advertising workflow, from content creation and campaign planning to targeting, delivery and optimisation.

Li also said Meta's AI investments were already generating incremental advertising revenue through stronger engagement, improved recommendations and more efficient monetisation. The company, however, did not disclose a separate dollar figure for AI-attributable advertising revenue.

Partnership ads cross $15 billion annual run rate

Meta's creator-linked advertising business emerged as another major growth area during the quarter.

Li said Partnership Ads, which allow advertisers to run campaigns with creators, brands and other businesses, grew more than 97% year-on-year and surpassed a $15 billion annual revenue run rate.

The figure represents an annualised revenue rate for the advertising product, rather than revenue booked during the quarter or payments made to creators.

Meta also completed the global rollout of its Creator Marketing Hub to all advertisers during Q3, bringing creator discovery, content management and partnership ad activation into a single platform.

More than 10 million creators are now discoverable through the hub, according to the company.

Meta is integrating its AI Business Assistant into the platform to allow advertisers to search for creators conversationally, identify content suitable for partnership ads and receive guidance on creator marketing activities.

The rapid expansion of partnership ads points to the growing integration of creator content with paid advertising, particularly as platforms build tools to make creator-led campaigns easier to discover, activate and measure.

Zuckerberg outlines Meta's next monetisation opportunity

Meta founder and CEO Mark Zuckerberg said the company's Family of Apps now reaches 3.64 billion people daily, with Facebook and Instagram recording all-time highs in engagement, driven by video consumption.

The company reported double-digit year-on-year growth in global Instagram time spent per user, while Facebook Reels time spent also reached record levels.

Zuckerberg also highlighted the launch of Muse, Meta's personal AI agent, alongside Muse Wonder and new AI-integrated devices.

Explaining the next phase of Muse's development, Zuckerberg said: "We need to do three things: scale the product, grow revenue, and optimize compute costs."

He outlined plans to generate revenue through commerce transactions, consumer and business subscriptions, and other services, while connecting Muse with personalisation across Meta's content and advertising platforms.

Meta said more than 10 million people in the US and Canada had set up Muse personal agents within approximately six weeks of launch.

For the advertising business, the broader strategy brings AI-powered recommendations, campaign automation and emerging commerce capabilities into an increasingly connected ecosystem.

The company expects fourth-quarter 2026 total revenue to be between $73 billion and $76 billion, while full-year capital expenditure is projected at $135 billion to $145 billion.

With advertising prices, impressions and AI-led conversion improvements all contributing to its third-quarter performance, Meta's results highlight the increasing role of AI in monetising engagement across its platforms.

For advertisers, the key question will be whether improvements in campaign performance and automation continue to deliver measurable returns as Meta's global average advertising prices rise.