Shulou(Shulou.com)11/24 Report--

Sina Technology News Beijing time on the morning of October 20, it is reported that Snap will open the third quarter earnings season for technology and social media companies. Investors expect modest revenue growth for most companies in the industry and will compare it to a difficult 2021, when Apple's privacy reforms began to upend the advertising industry.

But some analysts say the US is likely to suffer a recession next year, so forecasts for financial conditions in 2023 can only be guessed at best. investors, on the other hand, are cautious about over-interpreting "vital signs" such as advertising spending around the autumn shopping season as indicators of future performance.

In the previous period, record high inflation in the US and geopolitical uncertainty caused by the conflict between Russia and Ukraine have led US companies to slash their marketing budgets. This hurts US technology platforms, which sell digital advertising as their main source of revenue, and causes them to cut costs to maintain profitability.

"overall, we believe that the online advertising environment remains unstable and volatility continues every week," JPMorgan analysts wrote in a note to clients on Oct. 4. "

American technology companies have taken steps to prepare for the worst by cutting costs, stopping hiring, controlling employee allowances and focusing on for-profit projects. Some analysts say this has helped restore confidence on Wall Street in the short term.

Us social giant Snap is expected to report a 6% increase in revenue to $1.13 billion, according to IBES from Refinitiv, one of the world's largest financial market data and infrastructure providers. This will be the slowest quarterly revenue growth since Snap went public.

Snapchat is usually the first company to report quarterly earnings and is a bellwether for the social media industry. Snap shares are down 77 per cent so far this year.

The company said in August that it would cut 20 per cent of its jobs and cut loss-making projects because of the deteriorating US economy.

Google, owned by Alphabet, is the world's largest digital advertising platform, which has performed relatively well because brands need Google search advertising.

The company's wealth of advertising data and reliance on search ads insulated it from privacy changes launched by Apple on iPhone last year. These changes make it more difficult for platforms and brands to collect user data for personalized advertising.

Wall Street predicts that Alphabet's advertising revenue will grow 7.5% from last year, making it the fastest growing among large technology companies.

On the other hand, Meta has been affected by these changes, and investors will keep a close eye on the company's performance for evidence that Facebook and Instagram are increasing user engagement and that more brands are buying new Reels features, future challenge analysts say.

On average, analysts expect Meta's advertising revenue to fall 4.5%, the second consecutive quarterly decline, according to Refinitiv.

Meta shares have fallen 60 per cent this year due to fierce competition from TikTok, a short video app, and the company's own expensive investment in building metasmos and advertising. In addition, the effectiveness of meta-universe and advertising has declined due to changes in Apple's privacy policy.

"the company now called Meta is very different from what it was a year ago at Facebook," said Debra Williamson, chief analyst at Insider Intelligence, a research firm. "after dismal second-quarter results, we don't expect any improvement in the third quarter. It's likely to be worse."

Analysts at Bernstein, the investment research firm, said in a report that ads from large retailers promoting back-to-school and autumn shopping are expected to boost the growth of digital platform Pinterest. Wall Street expects revenue to rise 5% in the quarter from a year earlier.

However, some advertisers are shifting advertising revenue to larger platforms that are more widely used and have been shown to generate sales, posing a risk to Pinterest's revenues in the fourth quarter and next year, according to analysts at Credit Suisse.

Twitter, which is working to complete the acquisition of billionaire Elon Musk, has yet to announce a date for its third-quarter earnings.

Twitter's performance is unlikely to affect its share price, but depends on the possibility of a deal with Mr Musk. But Bernstein analysts said reduced spending by marketers on "brand advertising", which is Twitter's main business, could affect third-quarter results.

Snap and Meta are better known for so-called effect ads, which are used to drive sales or site visits.

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