More 2Q24 Ad Results: Platforms Still Strong and Traditional Media Owners Weak While Marketers Continue High Levels of Spend
Madison and Wall: Saturday Summary for August 3, 2024
In one of the busiest weeks for 2Q24 earnings, many of the world’s biggest global sellers of advertising outside of China provided new results, including Meta (#2), Amazon (#3), Microsoft (#5), Apple (#12), Snap (#13) and Pinterest (#19). In general we saw deceleration of global advertising from many of them, although levels of growth remain remarkably elevated, entirely consistent with our prior expectations for slowing growth likely still at high-single digit levels during the quarter.
For Meta in particular, as we wrote in a piece entitled “Another “Badass” Advertising Quarter,” the growth was noteworthy in context of the relative growth and absolute scale its competitors Google and Amazon possess. Acceleration at Microsoft’s massive search and news-related advertising business was also a stand-out positive outcome from the week.
The overall industry appears to be benefitting from a continuing expansion for budgets from many of the world’s largest marketers. As we wrote in our latest summary of CEO and CFO commentary this past week from the likes of Adidas, Allstate, L’Oreal, McDonald’s, Mondelez, Procter and Gamble, Wayfair and many others, senior executives continue to convey confidence in the benefits that come from spending on advertising. Of course, one could alternatively argue that as this group of individuals recognize that their competitors will spend at high levels, they are better off at least matching competitors’ spending choices rather than risk losing market share.
To be sure, growth rates from some companies produced headline “disappointments” among investors and securities analysts, as we saw in results from Snap and Amazon in particular, but arguably expectations held by those who were disappointed may have been overly positive. After all, if any industry grew by double digit levels forever, it would eventually account for the entirety of its economy.
But it’s not the whole industry that’s benefitting: digital platform-focused global companies continue to outpace growth from companies whose businesses are limited to individual countries and centered around content, most of whom see flatt-ish or negative growth. Just look to some of the other companies whose results we covered this week, such as Canada’s BCE, Cumulus, Gannett and others. We’ll undoubtedly see much more of that next week as the rest of the major owners of US TV networks report next week.