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The ad rebound appears to be real.
Yesterday, Meta reported record-breaking revenue in Q3, bringing in more than $34 billion, up more than 23% year over year. That’s the most it’s ever made in a quarter since going public.
Ad impressions delivered across Meta’s suite of apps grew 31% year over year, and the average price of an ad went down 6%. The company expects to bring in between $36.5 and $40 billion next quarter.
Meta’s earnings are in line with other tech companies that saw gains this quarter: Google, that other advertising giant, had similarly good news, announcing this week that it too saw double-digital revenue growth. Similarly, Snap reported a 5% revenue uptick year over year following two quarters of declines.
The growth signals that the digital ad market is starting to pick up following a year of economic uncertainty that caused some marketers to cut back on spending. Meta is seeing “continued strong advertiser demand in key segments,” CFO Susan Li said during the company’s earnings call.
Still, Li cautioned that the company has seen “more volatility” and “softer ad spend” at the start of Q4, when asked by an analyst whether “unfortunate geopolitical activity” is impacting the company’s advertising business.
“It’s hard for us to attribute demand softness directly to any specific geopolitical event. Historically, we have seen broader demand softness follow other regional conflicts in the past such as in the Ukraine war. So this is something that we’re continuing to monitor,” she said.
Snap also noted that “a large number” of advertisers had paused campaigns on its platforms since the start of the Israel-Hamas war. “While some of these campaigns have now resumed, and the impact on our revenue has partially diminished, we continue to observe new pauses and the risk that these pauses could persist or increase in magnitude remains,” the company wrote in its earnings report.
Like Google, Meta has recently rolled out a slew of AI products that marketers can use to create and target their ads, like generative AI text and image tools. Li said the company expects its investments in the “ad creation experience… will help improve our advertising performance, will help advertisers drive sales.”
Meta CEO Mark Zuckerberg said that Threads, the company’s Twitter imitation, had nearly 100 million monthly active users, with the goal of a billion users “if we keep at this for a few more years.”
Earlier this week, dozens of states sued Meta, claiming the company has harmed children by making platforms like Facebook and Instagram addictive. It was not mentioned during the earnings call.