LONDON: Wall Street is bracing for the slowest global revenue growth in the history of the social media sector, as intensifying competition from TikTok and Apple in advertising threaten to compound economic woes in the second quarter.
The dour expectations come after a blowout 2021, when social media ad sales in the United States grew 36 percent to reach $58 billion as brands increased marketing budgets to recover from the pandemic and reach customers online.
But social media platforms have since warned investors and employees that the tide is turning as inflation lingers around 40-year highs, an environment where brands spend less on advertising.
Meta Platforms Chief Executive Mark Zuckerberg told employees last month the company was slashing hiring plans and that “this might be one of the worst downturns that we’ve seen in recent history.”
Snap Inc, which owns Snapchat and is due to report earnings after the close, earlier said it expected to miss its own quarterly revenue forecast due to deteriorating economic conditions.
Global social media ad sales are now expected to grow by 11 percent, the slowest pace on record, according to media intelligence firm MAGNA, which downgraded the growth forecast from 18 percent.
Analysts had expected some degree of slowing growth after 2021. However, growing competition from viral short-form video app TikTok and Apple has created a “perfect storm” and “investors are rightfully wary” about digital ad growth this year, wrote Barclays analysts in a research note this month.
Apple had already upended the digital ad industry when it introduced new iPhone privacy controls last year that hurt the ability for companies like Meta and Snap to target and measure ads on their apps.
Apple’s own advertising business, which mostly consists of developers paying to promote their app on the App Store, is expected to grow 36 percent this year to $6.9 billion, Barclays wrote, adding that Apple and TikTok together will take 34 percent of every new ad dollar that is spent outside China this year.
Lior Eldan, chief operating officer of mobile app marketing agency Moburst, which has worked with brands like Uber and Reddit, said clients are now spending about two to three times more on Apple ads, in part because the effectiveness of ads on other platforms has been degraded by Apple’s privacy changes.
“We’ve seen dramatic increases in budgets on Apple search ads following the privacy changes,” he said.
While still much smaller than behemoths like Facebook and YouTube, TikTok is poised to grow over 200 percent to become a $12 billion business, Barclays wrote.
TikTok remains important for many clients’ advertising strategies, said Yvonne Williams, vice president of media at ad agency Code3, which has worked with brands like Gap and Dior.
Alphabet’s Google, which reports second-quarter earnings on Tuesday, is the company most likely to be shielded from negative effects, because Google Search is “mission critical” for many advertisers, analysts from RBC Capital Markets said in a note on Tuesday.
Meta, Snap and Pinterest are more exposed to the Apple privacy changes and competition from TikTok, Barclays said.
Social media revenue growth expected to slow as TikTok, Apple compete
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Social media revenue growth expected to slow as TikTok, Apple compete
- Global social media ad sales are now expected to grow by 11 percent, the slowest pace on record, according to media intelligence firm MAGNA, which downgraded the growth forecast from 18 percent.
Israel extends foreign media ban law until end of 2027
- Order replaces temporary emergency legislation that allowed authorization of so-called ‘Al Jazeera bill’
- Extension of temporary order empowers Communications Ministry to restrict foreign channels deemed to cause ‘real harm to state security’
LONDON: Israel’s Knesset approved late Monday an extension of the temporary order empowering the Communications Ministry to shut down foreign media outlets, pushing the measure through until Dec. 31, 2027.
The bill, proposed by Likud lawmaker Ariel Kallner, passed its second and third readings by a 22-10 vote, replacing wartime emergency legislation known as the “Al Jazeera Law.”
Under the extended order, the communications minister — with prime ministerial approval and security cabinet or government ratification — can restrict foreign channels deemed to cause “real harm to state security,” even outside states of emergency.
Measures include suspending broadcasts, closing offices, seizing equipment, blocking websites, and directing the defense minister to block satellite signals, including in the West Bank, without disrupting other channels.
Administrative orders last 90 days, with possible extensions. Unlike the temporary measure, the new law does not require court approval to shut down a media outlet.
The move has drawn sharp criticism from human rights and media groups, who warn it entrenches restrictions on Arab and foreign outlets amid a broader erosion of press freedoms.
“Israel is openly waging a battle against media outlets, both local and foreign, that criticize the government’s narrative; that is typical behavior of authoritarian regimes,” International Federation of Journalists General Secretary Anthony Bellanger said in November after the bill’s first reading.
“We are deeply concerned about the Israeli parliament passing this controversial bill, as it would be a serious blow to free speech and media freedom, and a direct attack on the public’s right to know.”
In a parallel development, the Israeli Cabinet unanimously approved on Monday the shutdown of Army Radio (Galei Tzahal) after 75 years, with operations ceasing on March 1, 2026.
In a statement, Attorney General Gali Baharav-Miara warned the decision “undermines public broadcasting in Israel and restricts freedom of expression,” lacking a legal basis.
