Meta’s earnings report continues the trend of industry revenue below expectations. While Apple’s ATT has impacted the industry, macro-economic (recession fears, inflation), geo-political uncertainty (Russia-Ukraine, UK, US mid-terms), and COVID-hangover (supply chain woes) are all causing the ad market to soften. 

Comcast’s recent earnings decline, which as a company should be insulated from ATT, is evidence that this is a broader cyclical issue. This is not to discount the impact of ATT on the industry, just that it’s not entirely to blame for advertising shortfalls. 

Meta has a more fundamental issue: Zuckerberg’s bet on the Metaverse has been immensely distracting to the advertising market (agencies and advertisers). Meta has zero advertising opportunities in this area, whereas companies like Roblox and EPIC have ad opportunities today. So, at best, Meta is stoking ad demand for others. 

Meta needs more coherence on their consumer video product and video advertising strategy and management attention on securing ad dollars in video (both short and long-form video). Meta is leaving video advertising dollars on the table and needs to innovate in ad offerings and end-user features on their core products (Facebook Blue and Instagram).