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    Big tech’s Q2 earnings: what paid social advertisers can learn from Meta, Snap and more

    Back in May, iCrossing UK’s James Mortimer digested for us the quarterly earning reports of big tech’s big beasts. Here, he’s back again for Q2, looking at how the platforms are weathering yet another turbulent period of economic uncertainty and privacy updates.

    With the wider macroeconomic climate looking crazier than ever, a lot of eyes are on big tech’s Q2 earnings. Among considerable doom and gloom, there’s still plenty for advertisers and brands to learn from key media suppliers’ latest updates.

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    Meta

    Meta’s revenue was down 1% year-on-year compared with Q2 2021. This is the first time the company has reported a yearly decline in revenue, but the reduction wasn’t as bad as Wall Street had projected.

    Meta attributed this reduction to the unstable global economic situation and growing privacy-focused policies, such as GDPR, around the world. Apple’s iOS updates, which have made it harder for advertisers to measure sales generated from the platform, also helped reduce demand for ads.

    In terms of creative and ad formats, Zuckerberg said that Meta is still very much focused on Reels: “It was good to see positive trajectory on our engagement trends this quarter coming from products like Reels.” Reels aren’t going anywhere; they still offer brands the opportunity to generate the strongest engagement and get the most attention.

    Remarkably, Facebook’s user base increased during Q2 by 1% to a staggering 2.93 billion people. Usership across Meta’s family of apps increased to 3.65 billion, a 4% rise.

    For advertisers, Meta’s key platforms, Facebook and Instagram, still offer the biggest opportunity to reach users at scale.

    Brand takeaways:

    • Although Meta’s overall revenues are down, the social giant isn’t going anywhere fast. There are now over 3.65 billion users across all platforms; almost any type of user you could dream of reaching is available on Meta’s platforms.

    • In a post-iOS 14.5 world, creative is more important than ever. Reels are the king of the creative jungle; short-form vertical video creative will pay dividends.

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    Twitter

    Q2 2022 is the second time Twitter has published results since Elon Musk attempted a buyout. Since publishing, a lot has changed at the organization. Musk has tried to withdraw his bid; the Twitter board wanted him to continue with the takeover; and a judge has ruled that Twitter could sue Musk if he didn’t follow though.

    Besides the ownership circus, there’s some mixed news for advertisers. Monetizable Daily Active users (mDAUs) increased 16% year-on-year, but revenue fell by 5% compared with 2021.

    This drop in revenue was attributed partly to a reaction to the noise generated by Musk, and partly to global ‘economic headwinds.’

    Although Twitter’s positioning and openness to brands is arguably as confusing as ever, with uncertainty in the direction the platform will go in if Musk does take over, the earnings did provide good news for advertisers. With more users to target, and seemingly fewer advertisers, there are opportunities for brands to dive in and deliver strong returns. 

    Brand takeaways:

    • Musk takeover seems further away than ever, which might mean slightly more stability for advertisers for the next few months.

    • Like Meta, Twitter’s userbase growth can only be good news for advertisers, with more users to reach across verticals.

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    Snap

    Although revenue increased 13% compared with the same time frame last year, Snapchat missed forecasted growth targets. Still, there’s some positive news for advertisers.

    Daily active users increased by 18% year-on-year, reaching 347 million. Snapchat also announced a desktop version. While the company will remain mobile-first, the new service will enable users to chat and make calls from desktop, potentially giving advertisers more inventory to target.

    iOS was again given as a reason for missing revenue targets, as advertisers try to understand how to attribute media spend in this new era.

    Snapchat also launched a subscription service. For $3.99 a month users can see who has rewatched their story, pin a best friend and change the app’s logo. It’ll be interesting to see how this performs compared with Twitter’s premium service Twitter Blue.

    Advertisers can be positive. With more users to target, ads should perform better. With Meta losing ground with younger users, an increase in the under-30 demographic on Snap will help brands target younger users.

    Brand takeaways:

    • Snap’s user and revenue growth are positive signals for advertisers. More users equal bigger opportunities to scale; increased revenues show that more advertisers are making the platform work.

    • Meta’s losses in the younger age group mean that reaching them on Facebook and Instagram will be more of a challenge. Snap offers a real opportunity to reach that demographic.

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    Pinterest

    Pinterest is an interesting platform for analyzing consumer behavior and spending. During the pandemic, growth on the platform accelerated with people stuck at home. Many used it to get inspiration for home improvement and family education. As the global economy swings toward a recession, analysts are looking at Pinterest as a guide for how consumers are behaving and spending.

    In their Q2 report, Pinterest reported no user growth, but revenue was up 9% year-on-year. In a letter to investors, Pinterest stated that there’s hard work to be done to increase its user base, especially in ‘mature’ markets like the US and Europe.

    Stagnant user growth and under-forecasted revenue figures were attributed to several reasons including, again, post-pandemic slump and iOS updates.

    For advertisers, the lack of user growth shouldn’t be a surprise since users’ figures grew ‘artificially’ during the pandemic. Although revenues missed expectations, growth shows that advertisers are making the platform work for them. There’s an opportunity to execute successful campaigns.

    Brand takeaways:

    • Although Pinterest’s userbase isn’t growing, the platform offers an incredible opportunity to reach users who are actively searching for keywords with rich social creative. As advertisers look to diversify from Meta, Pinterest should be a focus.

    • Despite a worsening macroeconomic situation, ad revenue is growing. The platform is working for advertisers, so brands who haven’t tested the platform could be missing out.

    The paid social space is constantly evolving. Disruptions from iOS updates aren’t going away, so advertisers need to adapt and test quickly to grow across channels. Meta continues to slow down, but platforms such as Snap and Pinterest are growing and could offer big opportunities for brands across verticals. 

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