So many apps for consumers, so much doom and gloom for platforms—what’s really going on in digital … [+]
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A billionaire with lots of experience in posting on a media platform, but none in actually owning and managing one, shows that a lack of trust can lead to the hair-raising evaporation of advertisers–per Elon Musk himself, “Twitter has had a massive drop in revenue” as brands and agencies “paused” buying on the platform as soon as he took over.
Adding to the screaming roller coaster effect was that, at least for a while on November 2, the valuation of Apple was $2.31 trillion, more than that of Alphabet + Amazon + Meta’s valuations combined, which added up to a “paltry” $2.3 trillion. That was a surprise!
These days of fright in the “ad-verse” in early November didn’t just follow Halloween, they came on the heels of earnings season in late October. When those earnings reports came out from the biggest platforms, late last month, suddenly the common wisdom was that the sky was finally falling on the digital advertising market. “Digital ads collapse” reported CNBC. The industry is bracing for “economic disaster” proclaimed the insiders at Insider.
Snap’s stock plunged 26% on the news. Facebook/Meta dropped 25%, with the stock already down 75% since September 2021. Alphabet showed revenues up 6%, at $69.09 billion, not enough to prevent a slump in that stock. So much doom and gloom.
Advertising-dependent heavyweights that were once considered unstoppable were reported to be looking washed up. Suddenly Big Tech wasn’t so big anymore.
But is that what’s really going on? We’ve been here before. Sure, if you’re investing, you’ve got to watch the swings, but if you’re a marketer trying to reach audience, or a government regulator thinking you have to swat the biggest players, the news hasn’t changed: the internet is phenomenally competitive. You’ve got to be nimble. The Great Pause on Twitter does not mean that the large consumer brands can afford to be out of the consumers’ eyes for long, and they might just relieve Snap and Facebook’s pain, which could well capture the loyalty of ad buyers leaving Twitter because they deliver the kinds of engaged audiences brands want. Or maybe all the consumers go to Mastodon and, like day follows night, the brands appear there?
Giants shrinking and expanding like imploding stars at lightning speed actually does take place in the competitive blood sport known as digital advertising, just as we saw with our own eyes in the first few days of November. And adding that to the results from earnings season makes one wonder, What appears to be happening? Is the tide going out on all digital advertising?
While marketers, or at least investors, might be wondering about Twitter’s ability to deliver a brand-safe environment, and Meta, Alphabet and Snap saw their own challenges in advertising results, Amazon defied the trends and grew its advertising business 25% year-over-year to $9.5 billion in the third quarter. It’s now at a run rate of almost $40 billion for the year, or about one-third that of Meta and one-sixth that of Google. That’s a phenomenally fast and lucrative business, even as talk of recession rings in the holidays. And it is happening with such speed that we can assume we are in for an “…….