Big Tech gains show the digital ad market isn’t out of the woods |
Feb 3 (Reuters) – Fourth-quarter results from Alphabet, Meta Platforms and Snap this week showed they are still in the clear after a difficult 2022 that saw ad-dependent companies shrink their budgets and plunge their stock prices.
The health of the advertising industry closely reflects the economy, and many advertisers are at record highs inflation rates and reduced marketing budgets in response to continued uncertainty about the recession.
Thursday GoogleThe owner of Alphabet Inc ( GOOGL.O ) reported a slight decline in quarterly ad revenue, missing Wall Street expectations and surprising investors as the world’s largest digital ad platform has traditionally been resilient compared to smaller rivals. Alphabet shares fell 5% in trading after the closing bell.
Insider Intelligence analyst Evelyn Mitchell said, “Google in size and Google “For a company as prestigious as this to have such disappointing results (which means the advertising industry) will not bounce back in one quarter,” he said.
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Snap Inc ( SNAP.N ), the owner of photo messaging app Snapchat, said on Tuesday that revenue in the current quarter was hit by competition for ad dollars and a tough economy. 10It expects to decrease to %.
“(Advertisers) manage their spending very carefully so they can react quickly to any changes in the environment,” Snap CEO Evan Spiegel said on the earnings call.
Meta Platforms Inc ( META.O ), the second-largest digital ad platform, lifted Wall Street on Wednesday as it cut costs and bought back large shares, even as it reported a sequential decline in its third-quarter annual revenue.
The company said that one of the reasons for the decline in revenue was a decrease in advertising spending by brands in the financial services and technology sectors.
Meta Chief Financial Officer Susan Lee said the wider economy continued to be “quite volatile” and it was too early to tell what the year would look like.
The mood among advertisers is one of “cautiously optimistic” for the year ahead, Meta’s global business group vice president Nicola Mendelsohn said in an interview Thursday.
Advertisers by region, Mendelsohn said USA were bullish on the stock market, sentiment in Europe struggled relatively and China showed signs of improvement, although the future remains uncertain amid the country’s reopening.
Reporting by Sheila Dang in Dallas; Edited by Christopher Cushing
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2023-02-03 07:37:01
Source – reuters
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