ByteDance's TikTok, Meta Platforms Inc's (NASDAQ: META) Instagram Reels and Alphabet Inc's (NASDAQ: GOOG) (NASDAQ: GOOGL) YouTube Shorts are the three largest short-form video platforms.
The META Analyst: Needham analyst Laura Martin reiterated an Underperform rating for Meta in a note published Friday.
Martin also compared Meta's Instagram Reels platform to industry competitors and reached valuations for each:
- TikTok, $218 billion.
- Instagram Reels, $203 billion.
- YouTube Shorts t $206 billion.
TikTok excels at revenue generation and engagement while Reels has the most monthly users. Shorts has a high user engagement similar to TikTok.
Monetization Takeaways: Per a survey of businesses advertising on the platforms, Instagram Reels is the most successful at driving sales followed by Shorts. TikTok is in third.
TikTok has the most advertising formats with Instagram/Facebook Reels in second and Shorts in third.
Ad buyers identify young demographics, interactive features and virality potential as positives in advertising on TikTok. Negatives include the advertising learning curve and a potential U.S. government ban.
Ad buyers like that Reels has the widest demographic base of users and more precise targeting and analytics as advantages. Advertisers feel like the ads are less interactive on Reels than TikTok. They remain concerned that advertising is too expensive given that nearly all advertisers use Meta.
Shorts has a diverse user base and easy targeting and analytics tools. Additionally, Shorts is integrated well with the entire YouTube ecosystem. Shorts is seemingly less popular among users.
User Feedback Takeaways: Users perceive TikTok as being the original short-form video platform and Reels and Shorts as being "imitations." Users also like TikTok's catered algorithm and frenetic pace compared to Reels and Shorts.