Meta's Q1 2026 earnings revealed global ad revenue of US$42.3 billion, up 16% year on year. The Australian and New Zealand market contributed an estimated A$1.8 billion of that total, making Meta the second largest digital advertising platform in Australia behind Google.
The growth is being driven by two things: Advantage+ automated campaigns and Reels monetisation. Advantage+ shopping campaigns, which use Meta's AI to automate audience targeting, creative selection and placement optimisation, now account for more than 30% of total ad revenue globally. Reels ad revenue has grown to an annualised run rate that Meta says is now "incremental" to existing feed and Stories revenue rather than cannibalising it.
For Australian advertisers, the Advantage+ shift has practical implications. The system requires less manual campaign management and often delivers lower cost per acquisition on the metrics Meta controls. But the trade-off is transparency. Advertisers have less visibility into why specific creative performs, which audiences are being reached, and how conversions are being attributed.
Estimated Meta ad revenue from Australia and New Zealand in Q1 2026
Meta's attribution model remains a point of contention. The platform defaults to a 7-day click, 1-day view attribution window that captures conversions well beyond what most advertisers would consider directly caused by the ad. For businesses running multi-channel campaigns, this creates double-counting with Google Ads and other platforms, inflating the apparent return from Meta spend.
The Reels growth story is more straightforward. Short-form video now commands the highest engagement rates on the platform, and Meta has successfully shifted advertiser budgets from feed and Stories into Reels placements. For brands producing video content, Reels is now a mandatory placement. For brands that are not producing video, the effective CPM of reaching their audience on Meta is rising as the platform prioritises video inventory.
Meta's AI investment is also reshaping the creative production requirements. The platform's generative AI tools can now produce ad creative variants, background images and text overlays within the Ads Manager. Early adoption data suggests these tools are most effective for direct response campaigns with clear product imagery, and less effective for brand campaigns that require nuanced messaging.
Why it matters
Meta is the default paid social channel for most Australian businesses. The platform's shift toward automation and AI-driven optimisation is reducing the skill gap between sophisticated advertisers and beginners, which sounds democratic until you realise it also reduces the competitive advantage of good media buying. When everyone is running Advantage+ with AI creative, differentiation moves to offer, product and landing page experience.
What to do about it
If you are running Meta Ads, test Advantage+ shopping campaigns with a dedicated budget alongside your manual campaigns. Compare performance on a blended basis, not just on Meta's reported ROAS. Use a third-party attribution tool or holdout testing to verify Meta's conversion claims. Invest in short-form video production for Reels. Review your attribution windows and adjust them to match your actual sales cycle rather than accepting Meta's defaults.
