Meta’s advertising business grew more than twice as fast as Google’s search business this quarter. Google, having just announced that search queries were at a record high, celebrated with the worst day in Alphabet’s history.
Meta’s ad revenue rose 26 percent in the third quarter to $63.1 billion, while Google’s Search and other unit rose 12 percent to $63.4 billion, the widest gap in Meta’s favour since 2021. Almost 10 million advertisers used at least one of Meta’s AI tools in the quarter. Alphabet fell more than 12 percent in a single day, wiping out about $500 billion of market value. Shopify, meanwhile, swapped the payment-method list at checkout for big side-by-side tiles roughly 30 days before Black Friday, which is rather like rearranging the tills on the morning of the January sales.
The rest is below, including a meme about naming files that landed closer to home than we’d like.
Tweet of the Week
Amazon Playbook: 5 Things DTC Brands Must Get Right to Scale Profitably
Meta’s advertising revenue rose 26 percent to $63.1 billion in the third quarter. Google’s Search and other unit rose 12 percent to $63.4 billion. The two businesses are now almost exactly the same size, and growing at very different speeds.
CNBC looks at why AI is doing Meta’s ad business a favour and Google’s a disservice, and what that means for where the money goes next. Inside:
The 14-point growth gap is the widest in Meta’s favour since 2021
Advertisers who took Meta’s AI recommendations saw almost 5% more conversions and raised their ad spend by 9%, according to CFO Susan Li
Simply Organic Maple: purchases up 57%, cost per purchase down 36%
Google search queries hit a record high while revenue growth slowed, as AI Overviews and chatbots answer the question instead of linking to it
Alphabet’s worst day ever: down more than 12%, with about $500 billion wiped off
(Record search queries and slowing search revenue is, one imagines, the corporate equivalent of a packed restaurant in which everybody orders tap water.)
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Quick Shots
Olivia Kory As of today, Meta is turning on product browsing in eligible ads unless you’ve opted out.
Mehtab | Karta Ventures One of the easiest ways to fix a lot of these = shifting into “fast” variable cost > “slow” variable cost.
Alex DR Demon of the Week: Live for 133 days, #3 ad in the brand’s library.
Here for the Memes
Top Headlines this Week
Best from LinkedIn
Harley Finkelstein: Merchants don’t all use the same AI assistant.
Some run their day in ChatGPT. Some live in Claude. Others use Gemini, Copilot or Perplexity.
Shopify connects to all of them.
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Stat Attack
Two ad businesses, almost exactly the same size, growing at 26% and 12%. At those speeds they won’t be the same size for long. Alphabet has already found out the expensive way, shedding about $500 billion in a day because people have started asking the chatbot instead.
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They’re reaching 7, 8 and 9 figure merchants.
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