A strong ad show from Alphabet and Snap puts the spotlight on Meta. Positive signs for Facebook’s parent company, Meta Platforms, have come from a resurgence in the advertising divisions of Google and Snap. This indicates that advertisers are increasingly turning to digital platforms due to the growing acceptance of artificial intelligence, even in an unstable economic climate.
On Tuesday, Alphabet (GOOGL.O) and Snap exceeded analysts’ projections for third-quarter revenue. The tech behemoth had robust growth in its YouTube and core search businesses.
According to Philipp Schindler, Google’s chief commercial officer, “AI is helping advertisers find as many people as possible and their ideal audience for the lowest possible price.”
With products like Performance Max, which uses AI to determine how marketing spending should be allocated throughout Google’s ad network, the business has been putting more emphasis on technology.
Meanwhile, Snap’s technological overhaul of its ad targeting capabilities paid off handsomely, as the average income per user rose in the third quarter.
After the markets close on Wednesday, Meta (META.O), which receives almost all of its advertising revenue, will release its profits. Wall Street expects the business to publish its strongest quarterly revenue rise in two years.
Analysts noted that the data indicate the ad market recovery is still on course, driven mostly by spending from retail firms. They said that Meta and Google may stand to gain the most.
“We expect the larger platforms like Meta and Google to lead the wallet share growth at least initially in this ad spend recovery,” Evercore ISI analysts stated.
Because of their greater reach and ability to draw in a consistent advertising supply, corporations are perceived as more robust to uncertainties generated by geopolitical turbulence, such as the conflict in the Middle East.
Meta has recently relied significantly on AI-powered features for ad measurement and marketing planning to fuel its expansion.
According to RBC analysts, “Facebook/Instagram’s tools for creating a marketing campaign are vastly quicker and easier to use” compared to smaller rivals like Snap, which may offer Meta an advantage.