Meta results have a major share – Business AM

Detail: Meta will release its numbers for the fourth quarter of 2022 on Wednesday.

• Meta is expected to post a third-quarter decline — and its biggest drop ever — of more than 6%. Refinitive. Therefore, Mark Zuckerberg’s company should finish 2022 lower. for 2023, Refinitive expects revenue to fall another 2.8% in the first quarter before returning to sub-1% growth in the second period.
• Still, “there are signs that Facebook may see a small trend change in ad spending,” Debra Williamson, an analyst at research firm Insider Intelligence, told Reuters. CNBC. “Facebook has had a hard time implementing their own tools and measures to prove the effectiveness of their ads (…) I think they’re improving in that area, so I’m hoping we’ll see maybe – A slight uptick for Facebook compared to the last two quarters it happened,” he said.
• Some predictions for 2023 are optimistic. Martin Sorell, executive chairman of British advertising agency S4 Capital, announced that Meta will make a very strong comeback in 2023. Compete with TikTok and other short-form video competitors,” he said.

Meta represents the hopes of thousands of businesses

Problem: When a giant like Meta, which accounts for nearly 20% of US internet advertising revenue, is in decline, it’s a sign that internet advertising is in bad shape.

• Even if the internet has changed in a few years with subscriptions like Spotify or Netflix, it has this free culture and companies still need to make money. The solution found for this was advertising.
• If online advertising pays less for Meta, so will other companies who share the rest of the pie. Therefore, thousands of companies offering free services with advertising will be affected by this drop.

2022 has been a tough year for online advertising

Context: Over the course of two years, Meta experienced many obstacles.

• In 2021, Apple introduced a new App Tracking Transparency (ATT) feature that reduces targeting by limiting advertisers’ access to a smartphone user’s ID. Meta said early last year that ATT would reduce its revenue by $10 billion for all of 2022.
• We can also add to this the collapse of technology companies. Facebook’s parent company, Meta, has lost nearly two-thirds of its value in 2022 as its revenue has declined for several consecutive quarters and it laid off 13% of its workforce in November.
• In addition, with inflation and the potential recession that may follow, market analysts predict that online advertising will be further disrupted. A survey of 50 ad buyers published this month by Cowen found that companies expect spending to grow just 3.3% in 2023, which the investment bank said represented “the weakest advertising growth prospects we’ve seen in five years.” represents. reminds CNBC. Last year, these companies increased their expenses by 7.5%. “Two-thirds of ad buyers have downgraded their budgeting process, citing inflation and slowing consumption, among other macro factors,” Cowen said.
• Finally, Meta captured less than 20% of all digital ad revenue in the US last year. They created a duopoly with Google touching more than 50% of the market by 2022, when the two giants fell below this bar for the first time since 2014.