The Clap
Snap’s (NYSE: SNAP) forecast of zero revenue growth for Q4 sent its stock spiraling down around 28%, signaling trouble for ad-reliant social media platforms.
The Deets
Meta (NASDAQ: META), Pinterest (NYSE: PINS), and Twitter (NYSE: TWTR) all saw their stock slide amid fears of lower-than-expected earnings.
Slashed budget costs from companies have significantly impacted the digital ad space, with digital ad companies losing almost a combined total of $1 trillion.
The digital ad space faces challenges from several directions, including increased competition from TikTok, changes in Apple’s privacy settings, and declining consumer demand.
Why this Matters
Snap acts as a warning to ad-reliant social media platforms, indicating that these platforms need to diversify their revenue streams in order to mitigate the effects of the current economic situation.
What Now
Many digital ad companies are reporting their earnings over the next two weeks.
