Meta’s European Ad Growth Slows Sharply Following Full Rollout of Low-Personalization User Ad Options

As European users gain formal rights to opt out of having their personal data heavily mined for targeted ad delivery, Meta’s regional ad revenue expansion has entered a clear deceleration trend, latest quarterly earnings data confirms.

Q3 Earnings Reveal Widening EU-Global Performance Gap

In the three-month period ending this September, Meta’s European ad revenue continued its downward growth trajectory, markedly underperforming the company’s global average, the firm announced in its Wednesday earnings release.

Year-over-year ad revenue growth in the EMEA region landed at just 18%, down steadily from the two preceding quarters, and lagging far behind the 33% year-on-year growth recorded across the U.S. and Canada. Meta did not explicitly name the Less-Personalized Ads (LPA) framework as a drag on results during the Wednesday call, but CFO Susan Li had flagged the risk back in the Q2 earnings follow-up call in July: "Now that the less personalized ads offering is fully rolled out across Europe, we are seeing its measurable impact, and this could act as an additional headwind for our regional performance."

For context, Meta’s European ad growth had already dropped from roughly 40% to 24% in the two quarters prior to Q3, even as growth in the U.S. and Canada ticked up slightly from 30% to 31%. "We are confident the EU’s mandatory free opt-out for non-personalized advertising is the single largest contributor to the European slowdown," Dominic Ball, equity research director at market analysis firm Rothschild & Co Redburn, told WIRED.

Regulatory Background of the LPA Mandate

Meta rolled out the LPA option for all Instagram and Facebook users across Europe at the start of 2024, after EU regulators ruled the company was in breach of Digital Markets Act requirements. The regulator ordered Meta to offer consumers an equivalent platform experience that did not rely on mass harvesting of personal data for ad targeting, and issued a €200 million fine for non-compliance.

A previous stopgap measure Meta rolled out in November 2023 — charging EU users a recurring fee for an entirely ad-free service for those who opted out of personalized tracking — was explicitly rejected by the European Commission as failing to meet regulatory obligations. Meta has never disclosed user uptake rates for any of the three ad experience options (personalized ads, LPA, paid ad-free).

According to Meta’s own public disclosures, LPA uses 90% less user data than its standard personalized ad system: ads are served primarily based on content a user browses during their active in-app session, alongside only minimal fixed demographic markers such as age, broad location, and self-reported gender. The firm warned in its official response to the EU’s original ruling that the framework would produce far weaker returns for regional advertisers: less-personalized ads deliver far lower conversion rates, drive fewer completed transactions, and get closed far more often by users due to irrelevant or repetitive creative. Wednesday’s earnings data bore this out: the price advertisers are willing to pay per ad impression in Europe is growing at a far slower pace than equivalent rates across the U.S. and Canada.

Meta Bets on AI to Reverse Regional Ad Headwinds

Li told investors on the Wednesday call that the company has "plenty of remaining runway" to boost ad conversion rates and efficiency in Europe, noting teams are "continuing to iterate on ways to enhance the actual core performance of our recommendation engine." Ball of Rothschild & Co Redburn also argues that Meta will be able to leverage artificial intelligence advances to improve ad targeting accuracy in Europe, even with access to far fewer personal user data signals.

A large share of investor questions during the earnings call centered on how this AI optimization plan ties to the recent launch of Meta’s personal AI assistant product Muse, which debuted last month. Li noted that early usage data shows people interacting with Muse demonstrate extremely high commercial intent, from requesting customized product recommendations, researching alternative offerings, to comparing pricing and specifications across competing items — behavior that will allow Meta to eventually tap into new, high-margin ad revenue streams directly through the Muse product to offset existing LPA-related efficiency losses.