April 28th, 2024 – After the challenges of the year 2022 as a whole, digital ad companies finally succeeded in not only recovering but mostly exceeding the expectations analysts had for the first months of 2024, reporting strong achievements and wonderful results for their investors this week, publishing their first-quarter results.
Companies have gone through tough times due to the crazy inflation of 2022 and the subsequent measurements of cutting costs and layoffs, mainly spread across 2023. Another major challenge digital companies had to face was the one of Apple’s IOS privacy changes, which obviously made it harder for ads to track users and to “popup” anytime. Both the macroeconomic context and policy-making entities have played a significant role in hindering the giants but, efficient strategies, reallocations of investments and adapting skills have altogether guaranteed strong performances for the giants.
Meta has shown a 27% jump in first-quarter revenue, the most robust growth rate since 2021: such accomplishment results from the effort of the American company in redesigning its ad business, fostering AI capabilities and on the increased spending of Chinese retailers, such as Temu or Shein, demanding for ads.
Alphabet’s revenues increased too, by 13% with respect to previous year, thanking YouTube’s advertising revenue surging by 21% to $8.09 BLN. Both the CFO and the various analysts have reported significant excitement for such performances within the ad sector.
Also, the company authorized the issuing of their first-ever dividends, declaring 20-cents per share, after Meta’s Board authorized theirs in February; since the news came out together with the publication of the brilliant results of the first-quarter, shares surged by 15% during after-hours trading.
The new approach pursued by the ad giants reflects their reacquired financial strength, their focus on more effective strategies and, last but not least, the evidence of their leadership position within the industry.
Author: Ilaria Savignoni