Questions about advertising are growing on social networks Associated Press

On social media, 2022 has been a tough year with protracted questions about spending on advertising, political advertising and capturing Twitter for $ 44 billion, which may or may not happen, depending on which Ilona Mask tweet you read.

Then late Monday, Snap, which runs Snapchat, a program containing vanishing messages and video special effects, issued a rather serious earnings warning, saying “the macroeconomic environment has deteriorated further and faster than expected” just last month. .

Social networking companies are competing for the same advertising money fund, which is increasingly threatened by rising inflation as well as changes in Apple Inc. may limit information Social networking platforms can gather users, which is a great selling point for advertisers.

Shares of Snap Inc. crashed 40% at Tuesday’s opening.

And because Wall Street isn’t sure if the company is outstanding or a canary in the coal mine of social media, shares of parental meta-platforms Facebook, Twitter, Alphabet and Pinterest have fallen along with them.

If early cuts persist, it could wipe more than $ 100 billion off the balance sheet in a sector that is already under duress.

Snap said late Monday that it now anticipates revenue and adjusted earnings before calculating interest, taxes, depreciation and amortization below the lower level of the previously projected range.

Justin Patterson of KeyBanc Capital Markets, a social media watchdog, warned investors not to read Snap’s earnings warning too much, calling it “a warning, but not to sound the alarm across the sector.”

“We believe it is better to look at each channel in the context of the nature of advertisers and verticals, the history of recommendations, vectors of income and investment growth, to assess the level of risk to income and profitability from the macro environment,” Patterson wrote.

Volatility comes in a week when both meta-platforms and Twitter hold their annual shareholder meetings, with a particularly intense emphasis on what can be a lively meeting for Twitter. Elon Musk has press the pause button on ransom, saying he needs more information on how many “spam bots” the social networking platform really has.

Dan Ives ’remark, who follows social media at Wedbush, summarizes the confusion.

“We believe that currently the probability that Musk will try to go and use this problem with a spam account to get out of the deal is 60%, and the probability that Twitter and Musk Board will give a new price in the coming weeks is 40%. He wrote in a note to clients.

When the market opened, Twitter shares fell more than 3%.

The parent company Facebook Meta has added to the fuss on social networks. The company said it would start giving more details publicly on how advertisers target people with political advertising a few months before the U.S. midterm elections.

Meta is particularly sensitive to changes made to Apple and is now fighting a civil lawsuit against its CEO Mark Zuckerberg. The District of Columbia on Monday sued Zuckerberg, seeking to hold him personally accountable for the Cambridge Analytica scandal, violated the privacy of millions of personal data of Facebook users, which became a major corporate and political scandal.

At the opening on Tuesday, the shares of Meta Platforms Inc. fell harder than any other company, down nearly 8%.

Alphabet Inc., the parent company of Google, fell 6%. Shares of Pinterest Inc. fell by 24%.

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