Read analysts’ coverage of Facebook and you’ll likely come away with a sense that Facebook’s stock price got hammered by a general decline in ad revenue with headlines like: “Facebook parent Meta’s revenue, profit decline amid ad slump” (AP), or “Meta’s profits plunge more than 50% as ad revenue dwindles” (NY Post).

Read on and you’ll see tearful mea culpas from the likes of Jim Cramer: “I was wrong. I trusted this management team. That was ill-advised.” (Fortune).

Pinning Meta’s poor stock performance on a global ad slowdown may seem like the easy answer, but it is just factually wrong. According to media agencies like Magna and WPP, ad spending is growing as WPP explains: “As clients seek to accelerate their growth and transform how they reach customers, the global scale of our offer … is proving its value for clients,” said CEO Mark Read. 

So what are we to believe? The answer is simple if subtle. Advertisers are shifting from Meta ad platforms to other emerging options including retailer ad platforms, like Walmart, direct mail (yes – really) and niche media platforms. Advertisers are exhausted dealing with the litany of Meta performance and trust gaps and realize Meta has no intention of addressing the pervasive issues on the platform. 

Bottom line. Meta’s ad revenue didn’t decline because of a global ad slowdown; they declined because advertisers are betting against Meta with their ad dollars. 

Next time an analyst professes to know what’s behind Meta’s ad revenue softness, remember they can’t know what every marketer knows; in tough economic times, advertisers increase their ad spend. That counterintuitive reality will flummox financial analysts every time but those of us in the business know better if only the analysts would ask us.