The largest digital advertising companies have experienced substantial sales growth in the last quarter, contributing to positive momentum in the US stock market as the 2024 election approaches and the holiday season looms, Axios reports.
After enduring years of volatility due to the pandemic, the global advertising market is showing signs of stabilization this year.
Investments in generative AI advertising products, a surge of political advertising linked to the upcoming US elections, and robust consumer spending have all contributed to impressive revenue and profit increases for major tech giants in the latest quarter.
Google reported a year-over-year advertising revenue increase of over 10%, driven in part by election-related advertising, particularly on YouTube. Philipp Schindler, the company’s chief business officer, noted that AI-driven advertising tools have enhanced efficiency for Google’s advertising partners.
“We believe AI will revolutionize every part of the marketing value chain.” Schnidler stated.
Meta Platforms Inc. saw a 19% year-over-year rise in sales, with profits increasing by 35% during the same period. Despite these strong figures, Meta’s stock price fell in after-hours trading due to concerns over anticipated increases in AI-related spending.
Snap Inc. also reported a revenue growth of 15% year-over-year, attributing this success to investments in AI and augmented reality (AR) that are enhancing innovation within Snapchat’s advertising platform, according to CEO Evan Spiegel.
In a noteworthy performance, Reddit exceeded analyst expectations in its second full quarter as a public company, with advertising income soaring 55% year-over-year. This growth led to the company achieving its first profitable quarter.
Roku reported over $1 billion in revenue for the last quarter for the first time, thanks to a 16% year-over-year growth in its platform business, which includes advertising. The company highlighted increased sales from political, retail, and consumer packaged goods advertising as key contributors to its success.
Despite the overall positive trends, some advertising categories continue to face challenges that could disproportionately affect certain companies. Meta reported a significant slowdown in revenue growth in the Asia-Pacific region, primarily due to reduced ad spending from major Chinese advertisers such as Temu and Shein. Additionally, Roku noted that sectors such as health, wellness, media, and entertainment are still experiencing pressure, as media companies that previously invested heavily in advertising to promote their streaming services have begun to cut back in an effort to improve profitability.
