• Meta reported a 4% year-over-year decline in ad revenue, but beat Wall Street's estimates.
• Meta's ad chief Marne Levine told Insider that AI will play a bigger role boosting advertisers' creative.
• Meta is also exploring new ways to make money from short-form video Reels.

Meta's rebuilt ad business has seen early success after it took a $10 billion hit last year thanks to Apple's privacy update. The company now faces advertisers slashing budget due to economic uncertainty.

Meta reported a third consecutive revenue decline (down 4% year-over-year to $32.2 billion) during its fourth-quarter earnings call due to those pullbacks. 

"There is a general feeling of uncertainty because the context is changing week-to-week," Marne Levine, chief business officer for Meta, told Insider. She added that advertisers still are focused on driving growth despite these economic contraints.

While Meta advertisers might be pulling back because of the economy, Meta still has an advantage over other digital ad platforms. Advertisers have said that as they cut spend in other channels this year, they're still focusing on tried-and-true platforms like Meta.

They also want to prove their ad investments led to results.

Meta said that artificial intelligence helped advertisers achieve 20% more conversions during the fourth quarter compared to the same time period last year. 

Levine said a feature called Advantage+ that uses Meta's AI to find relevant audiences for ads is paying off, with recent tests showing that the tool increased return on ad spend by 32%. Advantage+ also has a $4 billion annual run rate, Levine said.

Levine said Meta is using artificial intelligence to help advertisers test creative — like where text should go on an ad, the brightness of an ad, and what size an ad should be.

"Advertisers can get smarter [and] faster on what campaign creative combinations drive the best results," she said.

Meta wants to grow Reels and is testing shopping ads

Meta's short-form video feature Reels is also gaining traction but hasn't been broadly adopted by advertisers yet. Meta said that 40% of its advertisers use Reels, and Levine said that playthroughs of Reels videos across Facebook and Instagram have doubled over the past year.

To increase the monetization of Reels, Levine said Meta is working on improving the relevancy of Reels that users see, creating new templates for advertisers to make Reels, and developing new formats like commerce-based Reels units.

Meta is also testing shopping ads that allow advertisers to send clicks directly to their own e-commerce sites, or to the Shop section on Facebook and Instagram where people buy directly through Meta. Meta then takes a cut of revenue. 

"It's still early, but we're excited by what it is that we're seeing here," Levine said.