– Alphabet (GOOGL.O) and Meta Platforms (META.O) are expected to report muted impact from generative artificial intelligence on their advertising business in their fourth-quarter results.
– Alphabet has introduced AI tools to help advertisers target audiences more cost-effectively and distribute marketing budgets across Google’s ad network.
– Meta is using generative AI to create variations of ad campaigns.
– Bernstein analysts consider generative AI to be in the “hype cycle” but recognize investors are looking for incremental use cases and revenue streams.
– The digital advertising core business is expected to have been resilient for the quarter ended December 31.
– Microsoft (MSFT.O) is anticipated to benefit early from the generative AI race, with increased demand for its cloud services.
– Alphabet’s stock surged 58% last year, Meta’s stock nearly tripled, and the S&P 500 index gained roughly a quarter, partly due to an AI-fueled tech rally.
– Political advertising is expected to be a catalyst for Meta and Google, with spending on political advertising in the U.S. predicted to jump 30% in 2024 from 2020.
– Alphabet is expected to report an 11.8% growth in fourth-quarter advertising revenue to billion.
– Google introduced the AI chatbot Bard and a search generative experience (SGE) that generates written responses to some search queries.
– SGE could contribute between .6 million and 3 million in incremental search advertising revenue by 2025.
– Meta’s AI tools for advertisers have shown potential time savings for users.
– Meta is expected to report .1 billion in fourth-quarter revenue.
– Meta’s AI tools that find potential customers and test ad performance are earning billion on an annualized basis.
– Meta could generate .7 billion in ad revenue in 2025 if it introduces paid ads within AI assistants on WhatsApp, Messenger, and Instagram.
– Snap (SNAP.N) partnered with Microsoft to place sponsored product links in its chatbot, which could earn Snap 4 million in 2024, growing to 6 million in 2025.
– Amazon.com (AMZN.O) is introducing ads on its Prime Video service and developing Amazon Bedrock, a service for creating applications with AI models.
– Amazon’s Prime Video ads could increase its ad revenue growth by 5% to 10%.
– Amazon is set to report its results the same week as the article’s publication.