🍰 Big Tech's big ad slice

While you feel scrolly-tappy... Digital ad giants like Facebook feel cash-happy. As the economy reopens, marketers are itching to reunite you with their jeans and lipsticks — so they're bombing your feed with ads. Much of Big Tech's blowout earnings last quarter were driven by hot demand for digital ad real estate.

• Facebook's ad sales grew an impressive 46%, while Google's grew 69% — YouTube ad sales grew even faster, as you memorized car commercials.
• Snap's quarterly sales more than doubled from last year, and Twitter's soared 74%
• Amazon, which is newer to the ad game, saw its ad revenue more than double.

The digital ad pie is growing... and legacy media wants a bigger slice. Legacy orgs like Comcast's NBC and AT&T's WarnerMedia used to pull in big bucks from TV spots. But as social apps and streaming services replace OG TV, cable cord-cutting has accelerated. So during the pandemic, legacy networks launched their own streamers to boost ad bucks. So far, their efforts are promising:

• NBCUniversal's ad sales rebounded 32%, thanks in part to its new streamer Peacock, which now has 20M+ users.
• WarnerMedia's ad sales jumped 50% last quarter, as it launched an ad-supported version of its HBO Max streaming service (feat. Friends: The Reunion).
• Discovery, which owns Food Network and HGTV, posted strong ad revenue growth, bolstered by its new streamer Discovery Plus.

Subtle... On Tuesday, Chinese state media called video games “spiritual opium” and an “electronic drug.” The harsh labels sent shares of Chinese company Tencent, the world’s second-largest video game maker, down 10%. Then, Tencent limited kids’ playing time to just an hour per weekday — even harsher.

Mounting pressure… China’s regulation of tech companies has intensified over the past year. In November, China canceled fintech giant Ant's $34B IPO — and made it pay a record $2.8B fine for “monopolistic acts.” In June, China banned ride-hailer Didi from adding new users — the stock has plunged 40% since. Now, China’s tech interference has expanded even further:

• Food: China is now requiring food delivery companies to pay local minimum wages. China’s #1 food deliverer Meituan lost $60B in market cap in two days in July.
• Education: China banned private tutoring companies from: making profits, raising money from foreign investors, and going public.
• TLDR: China's moves have rattled investors, sending the country's tech index down as much as 9% last week. Meanwhile, Goldman just slashed its 12-month forecast for Chinese stocks by 20%.

• AUX: Uber's quarterly ride bookings nearly tripled from last year, but it still lost $500M+ as it splurged on incentives to attract drivers.
• Juicy: GM, Ford, and Chrysler will reportedly announce plans to have 40-50% of new vehicle sales by 2030 be electric models.
• Paid: CVS will boost its minimum wage to $15/hour next year. Profits jumped last quarter as it delivered 6M Covid tests and nearly 17M vaccines.
• Yikes: LinkedIn will have to face a lawsuit alleging it inflated video view counts and overcharged hundreds of thousands of advertisers.
• Grad: Target will pay 100% of college tuition for its workers in a bid to attract talent, joining Walmart and Starbucks in the move.
• Flated: Crocs, Louis Vuitton, and Ralph Lauren have raised their apparel prices by 17% or more to offset rising prices caused by supply issues.

• Weekly jobless claims
• Earnings expected from Moderna, Square, Allstate, Carvana, Expedia, Dropbox, Paylocity, Wayfair, and Zillow

Authors of this Snacks own shares of: Snap, Amazon, GM, CVS, Square, Moderna, Uber, Starbucks, Walmart, and Google

ID: 1749294