Pinterest Inc. and Snap Inc. expected an online ad rebound from the downturn they experienced early in the COVID-19 pandemic, but the optimism that has spread across the entire sector, especially Facebook Inc., can be misleading.
New users are growing rapidly. Closed DIY folks looking for new home improvement projects during the pandemic, Snap SNAP,
Are making a big profit Advertisers want to keep in touch with their friends and reach out to young users who make funny videos on Snapchat. Investors have sent their Pinterest stock up 25% or more in after-hours trading after Wednesday afternoon earnings reports, similar to Snap’s earnings last week.
Both reports are owned by Alphabet Inc. Sent stock to online advertising companies like GOOGL.
Facebook Inc. FB,
And Twitter Inc. TWTR,
However, there are still questions as to whether the growing advertising assistant will lift all their ships. For Facebook, Pinterest and Snap’s executives did not actually say the word “Facebook” and admitted to boycotting the interests of the social media giant.
Todd Morgenfeld, Pinterest Chief Financial Officer, mentioned in a conference call on Wednesday that “the downwind we’ve experienced with advertiser boycotts on social media that started in July.”
“We continue to benefit from marketers who put positivity and brand safety first,” Morgenfeld said. “Advertisers are saying that Pinterest is more brand-safe compared to other consumer internet platforms, and it’s not yet clear how long this trend will last, especially after the US elections, but it has benefited from it in the third quarter.”
Snap did not comment on the risks, but also mentioned advertisers looking for a safer platform.
Snap Chief Business Officer Jeremi Gorman said last week, “Because brands and other organizations have used this period of uncertainty as an opportunity to assess advertising spending, we have seen many brands try to align their marketing efforts with platforms that share corporate value.”
Many advertisers July Facebook boycott announced aloud, which Eminent celebrities eventually joined. Boycotts stemming from concerns about platform fragmentation and misinformation It didn’t affect Facebook’s financial results last quarter., And so far analysts Predicted that the dynamics would continue..
Facebook will release its third-quarter earnings on Thursday afternoon, and based on past tough times, it’s unlikely that it will hit its bottom line. Although it remains in the eyes of a storm during the US presidential election. But even if Facebook survived the storm this fall, it could lose prospective users due to its two rival services. Pinterest said the Corona 19 surge is mostly made up of younger users, and Snapchat is permanently focused on attracting younger users. user.
It’s an open question whether Pinterest and Snap can continue to leverage these interests and maintain momentum. Both companies have a much shorter operating history and do not provide real guidance on the results, but instead provide informal opinions or perspectives on the quarter. Snap said it’s still unclear, given the epidemic, “whether key sources of ad demand will materialize in the same way as last year.”
“It’s hard to predict short-term advertiser behavior, especially during the election season,” Pinterest said.
Both services are in a position to benefit from Facebook’s losses in the short and long term. Facebook can withstand the churn of advertisers or users with its third-quarter report, but its competitors are intensifying as Mark Zuckerberg and backlash against Facebook’s practices continue to tainted the company.
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