Google’s search revenue over the period grew at a 13% clip compared to the same stretch last year, to reach $40.7 billion. It seems like a two-track online ad economy emerged over the last quarter, with advertisers shoring up search ad spend as a critical part of their media strategies while cutting other areas like online display and social media. So why is ad spending slowing on platforms? We took a closer look. Specifically, advertising spending, in particular, auction-driven direct response advertising is among the very few line items in a company’s cost structure that they can reduce immediately in response to pressure on their top line or their input costs.” Derek Andersen, chief financial officer at Snapchat, said: “We’re seeing these various headwinds put pressure on the earnings of a wide variety of companies, and this is directly impacting the demand for advertising.Foreign currency headwinds also increased throughout the second quarter.” The deceleration has been broad-based across verticals, and we believe businesses are lowering their advertising spend in response to the increased economic uncertainty. Dave Wehner, chief financial officer at Meta, said: “Advertising revenue growth slowed throughout the second quarter as advertiser demand softened.Within other revenues in the third quarter, we expect an ongoing headwind from the fee changes and the slowdown in buyer spend that impacted results in the second quarter.” Ruth Porat, chief financial officer of Alphabet, said: “In YouTube and Network, the pullbacks in spend by some advertisers in the second quarter reflects uncertainty about a number of factors that are challenging to disaggregate.Here are the main sound bites from their earnings calls: Twitter’s ad revenue slowed to a crawl in the quarter, hitting $1.08 billion - a 2% gain year over year - as the platform struggled with economic challenges and a court battle with billionaire Elon Musk, who offered $44 billion to buy the company before trying to back out of the deal.įorecasts for the remainder of the year from these companies were equally as glib.Advertisers are cutting ad spending on the app more than expected - a slump the company attributed to the broad economic uncertainty. That’s 13% up from the prior-year quarter, but it’s also short of analysts’ expectations. Snap’s revenue for the second quarter was $1.1 billion.It’s the company’s first revenue decline in a decade. Facebook owner Meta’s quarterly revenue (the bulk of which comes from advertising) came in at $28.2 billion, down one percent on the same period a year ago.That’s the slowest pace since Alphabet began disclosing that data in 2019. YouTube raked in $7.4 billion in ad revenue in the second quarter, up 4.8% from a year earlier.
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