The online-ad industry is being shaken up

- sellers, 2021 was always going to be a hard act to follow. As work, play and shopping shifted online during the covid-19 pandemic, internet advertising boomed. In America spending rose by 38%, to $211bn, compared with average annual growth of 21% in the preceding five years, according to eMarketer, a research firm. Smaller social-media firms such as Pinterest and Snap at times hit triple-digit year-on-year quarterly revenue growth. Even giants such as Alphabet (Google’s parent company) and Meta (Facebook’s and Instagram’s), which receive a third and a fifth of the world’s digital-ad dollars, respectively, clocked rates of 50%. The contrast with 2022 is stark. On July 21st Snap reported that its sales grew by 13%, year on year, in the second quarter, its most anaemic ever. In a letter to investors, the firm confessed that so far this quarter revenue was “approximately flat”. The market was spooked, and the company’s share price fell by almost 40%. The next day Twitter, which also depends on advertising, reported that its revenue had fallen slightly in the three months to June, compared with last year.