Digital ad market is finally on the mend, bouncing back from the ‘dark days’ of 2022

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Digital ad market

Meta, Alphabet and Snap all reported first-quarter results this week that beat analysts estimates, showing acceleration in advertising growth.

The companies had been struggling to rebound from a dismal 2022, when rising interest rates and inflation caused brands to rein in their spending.

Analysts at Citi wrote in a note Friday that the broader advertising environment is “clearly strengthening.”

After a brutal 2022, when brands reeled in spending to cope with inflation, and a 2023 defined by layoffs and cost cuts, the top digital advertising companies have started growing again at a healthy clip.

The companies entered earnings season in a favorable position in that their numbers would be comparable to historically weak periods. But investors and analysts were cautious in their expectations, given the political and economic instability in various markets across the globe and the ongoing challenges posed by high consumer prices.

Meta, which was the first in the group to report results, put some fears to rest on Wednesday, showing a 27% jump in first-quarter revenue to $36.5 billion. For the Facebook parent, it was the strongest rate of expansion since 2021.

“When Meta was in its dark days two years ago, the company knew what they had to do to get back on track,” analysts at Bernstein wrote in a note after the earnings report. “To their credit, Meta defended the core.”

Additionally, emerging trends such as augmented reality and interactive ads offer immersive experiences, capturing the attention of digital-savvy audiences. As advertisers embrace these technologies, the Digital ad market is poised for further expansion and evolution.
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