Advertising Landscape: AI Impact and Emerging Competitors

Meta's advertising revenue grew 10% year over year, driven by strategic responses to challenges from Apple's privacy changes and competition from TikTok.

### Meta's Advertising Success and Challenges: A Data-Driven Perspective
* 📊  Mehta's **10% year-over-year revenue growth** aligns closely with Zuckerberg's reported **11% growth**, indicating the accuracy of MC Mac's data tracking over 1700 top global brands.
* 🔍  Mehta's success can be attributed to strategic shifts, including **focusing on core revenue streams like advertising**, **responding to Apple's privacy changes**, and **leveraging AI to lower barriers for advertisers**.
* 🎯  The effectiveness of Mehta's ads has been enhanced by **encouraging advertisers to integrate with their event attribution API** and **enabling offsite retail media partnerships**.
* 🔮  AI, while important, is seen as the **third factor driving Mehta's growth**, with the removal of creative barriers opening up **opportunities for small and medium businesses**.
* 🔍  Mehta's main challenge comes from TikTok, which now represents **20% of MC Mac's total traffic**, posing a **significant threat to Meta's dominance in advertising**.
* 📉  The potential divestment or ban of TikTok in the US raises concerns for advertisers, but the platform's effectiveness may **continue to attract investment** until concrete action is taken.
* 📈  Despite TikTok's rise, Mehta remains the most trafficked advertising channel, representing about **40% of MC Mac's total traffic**.
* 📊  The data shows a **190% year-over-year increase in TikTok traffic**, compared to only **10% for Mehta**, highlighting the platform's **rapid growth** and **competitive challenge to Meta**.

Rachel, you have this rich data set tracking where advertisers invest their dollars across not just matter, but its competitive landscape as well. And I think what's interesting is that the data you track was basically justified by their forecasts for sales in the current period. Just your response to that? Yeah. Thanks, Meadows, for verifying our data. So yesterday, Zuckerberg reported 11% year over year revenue growth. MC Mac works with over 1700 of the biggest brands in the world powering the commerce media. What did we see in our data? We saw 10% year over year revenue growth. So it's absolutely spot on. Metta remains the most traffic brand advertising channel at Nick Mack on any given day. It represents about 40% of our total traffic. So what's interesting is you have the data and then what you need to do is find the reasons behind the data. Right. And we went into the earnings print

solely focused on artificial
intelligence. It seems like the early work and
investment Matt has made in AI is just making the ads more competitive.
Is that fair? Air is part of it, but I actually think
something comes before it. For the last two and a half years, Mehta
has stopped focusing on shiny objects like the metaverse, and it got back to
business and focused on its core revenue stream, which is advertising.
Metta had to respond to Apple's privacy changes, and it responded in a big way.
Metta did a huge campaign to every big global advertiser and essentially
encouraged them to integrate with their event attribution API, which bullet
proof the effectiveness of the ads. That was number one.
Number two, Metters also made a concerted effort to partner with
retailers and essentially enable offsite retail media within the Metta platform.
That also improves the effectiveness of their ads.
I would argue that A.I.

is number three.
What A.I. is doing for Metta and for really all
advertising platforms is lowering the barrier to entry.
One of the major barriers to entry in advertising is creative.
And so if Metta can remove that barrier, it actually opens themselves up to any
business on the planet. So I suspect with the investments in
A.I., you will see their small medium business advertising grow.
So I want to linger on that point a moment longer.
We just showed the pie chart breaking down.
We have the Thais as a place of their money.
The story is the one that you're telling at least is so similar to last week with
Alphabet. Again, we went into it really focused on
AI. But the biggest contributor to growth to
growth was just the search business, the legacy business.
100%. It's all about making every dollar
stretch for the biggest advertisers in the world.
You know, on top of the big tech

earnings. You've also had the big CPG
earnings in the past few days. And what they're struggling with is top
line growth. Where is top line growth going to come
from for these advertisers investing in channels like Meta, Google, and TikTok?
Going back to that pie chart, what you also see is, yes, Meta is the most
trafficked source within the platform. But what's number two?
TikTok. TikTok now represents 20% of our
total traffic. If we were speaking four years ago, TikTok
wouldn't even be in that pie chart. So if I was Meta, I think the big
headwind that they now need to worry about is TikTok, and they alluded to
that in their earnings as they did allude to.
Okay. So let's look at it from the opposite
perspective. TikTok faces a divest or ban scenario
in the United States.

If you're an advertiser, why would you
keep putting dollars into that platform if you know that that's a potential risk
down the road? Because of the effectiveness of Tik Tok.
The reality is with advertising, it's very easy to move dollars from channel
to channel. We've been on the show, we've talked
about this in the past. We saw a 100% decline in traffic.
Did that matter to advertisers? No, they just reallocated the dollars
elsewhere. So until something actually happens with
Tick Tock, you will continue to see brands invest in that platform because
of the effectiveness of the ads. In one year, we've seen a 190% year over
year increase in tick tock traffic. We only saw 10% in Meta.
Again, if I was meta, I would be very concerned about tick tock right now.

Meta Should Be Worried About TikTok: MikMak CEO

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The Impact of Metta's Strategies on Advertising Revenue

Metta's advertising revenue has seen a 10% year-over-year growth, in line with Zuckerberg's report of 11% growth.

The company's focus on AI and offsite retail media, as well as its response to Apple's privacy changes, has significantly improved the effectiveness of its ads.

By encouraging integration with its event attribution API, Metta was able to strengthen the effectiveness of the ads and enhance its revenue streams.

is reducing the barrier to entry for advertising, particularly in the creative aspect.

This is expected to lead to growth in small and medium business advertising for Metta.

, the search and legacy business remains the biggest contributor to growth for the company.

The Impact of TikTok on Advertising and Top Line Growth

Top line growth for CPG advertisers is a challenge, despite investing in channels like Meta, Google, and TikTok.

TikTok has rapidly become the second most significant source of traffic, presenting a new challenge for Meta and other platforms.

Additionally, the potential for a divestment or ban of TikTok in the US could have a significant impact on the advertising landscape.

Advertisers continue to invest in TikTok despite potential risks, due to its effectiveness in driving traffic and the platform's significant year-over-year increase in traffic.

The ease of reallocating advertising dollars between channels has allowed brands to maintain their investment in TikTok, even in the face of a 100% decline in traffic on other platforms.

This rapid growth of TikTok raises concerns for Meta, with its much lower traffic increase.