Meta suffered its first year-on-year revenue decline in Q2, as long-standing challenges crystalise and an economic slowdown in the US dents display ad spend.
In response, Meta is retooling its products to neutralise threats from post-social competitors like TikTok, and trying to minimise the impact of data restrictions.
The long-term pivot to the metaverse is Zuckerberg's next big bet, but funding it depends on core business strength.
YouTube’s tepid quarter signals a two-track online ad economy with advertisers protecting search spend as an essential cost of sales while cutting online display.
YouTube faces a challenge to strengthen its brand and direct response ad products while sacrificing some income to Shorts, its answer to competition from TikTok, which we estimate added three times as much ad revenue as YouTube in H1.
Beyond the short term, brands need to generate new demand, and that cannot be accomplished at the bottom of the funnel.
This report is free to access.
The Glasgow Climate Pact agreed at COP26 sets out national pledges to achieve net zero and contain global warming to 1.8°C above its pre-industrial levels— COP27 will buttress pledges, now at risk from the energy crisis, and advance some nations to 2030.
The TMT sector is a leader on net zero in the private sector. Companies that measure their end-to-end carbon footprint throughout their supply chain—as many do in the UK’s TMT sector—can target their GHG emissions.
The TMT sector underpins the UK’s vibrant digital economy that enables hybrid work-from-home (WFH), which reduces fossil fuel use thus heading off both the energy crisis and the climate crisis.
TikTok has reached a billion users worldwide just four years after its global launch, much quicker than social media rivals, though its ban in India is a drag on growth.
TikTok’s popularity with under-25s has contributed to a hollowing-out of Meta’s active userbase. During the pandemic, TikTok also expanded its reach among older demographics, cementing its position within the mainstream and posing a further threat to Meta.
TikTok could earn twice as much revenue as Snap in 2022, making it the first app to break out of the mid-league in years, with a huge runway for growth backed up by ByteDance’s remarkable success in China.
ByteDance is rushing to sell a 20% stake in TikTok Global to Oracle and Walmart at an enterprise value of $60 billion. TikTok otherwise faces a ban in the US on 12 November, subject to legal challenges.
The sale hinges on ByteDance obtaining approval from China to export TikTok’s core technologies. China updated its export control rules to include algorithms (and AI), entrenching a tech cold war with the West.
TikTok has confounded regulatory woes in India and the US, and renewed competition from US tech, to post dizzying user growth in every major internet region where it is available, casting off its image as a niche youth product and entering the mainstream.
Microsoft hopes to buy TikTok from Chinese owner ByteDance before President Trump’s Executive Order halts transactions with the company in mid-September. Twitter is now in the game, but is unlikely to prevail
Worth tens of billions, TikTok would be the biggest acquisition in Microsoft’s history. This hot new digital platform has hundreds of millions of users and an ad business that could overtake Snapchat’s. Extracting the technology from ByteDance may take years
Selling TikTok to shake off anti-Chinese scrutiny would signal ByteDance’s abrupt exit from the digital world stage with a fabulous return on its investment, while letting TikTok users continue to enjoy the service. However, losing TikTok sinks the global growth story that ByteDance was lining up for its anticipated IPO
Launched to the world in September 2017, TikTok is the first Chinese app to pose a serious threat to Western social media companies as it attracts hundreds of millions of Generation Z users around the globe
Privately-owned parent company Bytedance earned $7 billion in online advertising revenues in 2018 and is valued at $75 billion, placing it ahead of Uber as the world’s most valuable internet start-up, with an IPO likely this year
Bytedance’s goal of earning half its revenue outside China by 2022 is far from certain. In order to hit the target, TikTok will need to attain super scale with best-in-class revenue per user, an unlikely combination
Cross-device identity profiles are used to stitch together fragmenting online ad audiences, but also to enable new links between advertising and marketing, across European markets
This moves value from media itself to understanding each consumer and how they access content and services on proliferating connected devices
By 2020 we predict that 58% of all UK online ad buys by value will make use of high-quality audience IDs, led by the largest advertising platforms but limited by privacy regulation and cost
To diversify revenue in a saturated US mobile market, telecoms giant Verizon Communications followed an earlier merger with AOL by acquiring Yahoo for $4.8 billion
The combined online ad platforms are likely to become the most viable contender for third place in the US, after Google and Facebook
Verizon’s mobile subscriber data could narrow the market leaders’ targeting and measurement advantage, but regulation and customer reception pose risks
Paid placements for content marketing online in Europe will increase by 186% from 2014-2020, to over €2 billion
It is a particularly exciting area for premium publishers, who can leverage their content expertise to reverse the flight of ad money to lower-cost properties. Almost all are developing creative content offerings to capture this value
Metrics and measurement, disclosure and cost remain as challenges for content marketing online, but growth is strong due to high commitment to spend from advertisers