Snap's revenue miss is spooking investors, largely due to a decline in advertising spending. Cheddar News speaks with Jeremy Goldman, analyst at Insider Intelligence about which other companies are possibly hurt by the shrinking pool of ad dollars. 

Snap Earnings Trigger Social Media Sell-Off

let's also take a look at some other headlines that were watching Tiktok says it can't track american users with their location data. The denial coming after report from Forbes saying chinese owned Tiktok plan to use the data to monitor specific U. S. Citizens. Well the chinese social media companies saying it doesn't collect the precise GPS data of its users so it would be unable to track even if it wanted to Elsewhere. Sam Adams, parent company Boston beer returning to profitability in the latest quarter shares of the company of a whopping 19% today and the company seeing fewer sales of brands like the truly hard seltzer angry orchard and SAm Adams. But those lower sales were offset by higher sales of twisted tea and hard mountain dew. We gave you that news yesterday. So the chair and founder expressing optimism when it comes to the long term outlook for boston beer's, it navigates what he described as a quote dynamic operating environment. End quote there. You see the results so clearly a pretty nice gain. Um and the beat both on the top of the bottom lines and elsewhere a snap, getting hit hard today. It's kind of the outlier amid this earning season after a forecast zero sales growth for its busy holiday season pointing to more pain ahead for the company and industry. So the social media sector, which is heavily reliant on digital advertising like Youtube's parent company alphabet facebook's parent meta and Pinterest, all feeling the pressure and snap support was the streets first peek into the current state of the online ad space that suffered as brands have been cutting marketing budgets in response to declining consumer demand? Well, digital ad companies have together lost about a trillion dollars in value this year. So joining me now is Jeremy Goldman, director of briefings at Insider Intelligence. Jeremy, thanks so much for coming on the show. It's good to see you. This is a digital marketing commerce research company. What is snap's earnings pretend for the rest of these tech giants in the state of the digital ad space. Yeah, great question. Uh they're all in honestly a bit of a bind because more and more ad budgets are increasingly under scrutiny and snap is particularly challenged because they have some great long term aspirations. But they're often kind of put into the experimental ad budget uh bucket for a lot of companies. And because of that, when you're focused more on performance marketing, you're more likely to pull back on that experimental spend. Uh and and that's kind of the bind. That snap is in right now. So I think it is interesting that alphabet is actually outperforming today. I think we have a board of some of these stocks, alphabet is doing well. And as your data there, Jeremy did show it looks like search is holding up pretty well social Doing okay. But then we see a bit of a dip off. Yeah, alphabet actually up 1.1% today as these other platforms are down. Um let's talk more about meta and Pinterest on the screen here, I guess. What's the underperformance for Pinterest? Just you think perhaps because it's a smaller company might not have the capital or the balance sheet to kind of weather a pull back to the same extent that meta alphabet might have. Exactly. I think in a lot of ways uh marketers have to be very thrifty with respect to their spend now, you know, they're not really sure exactly how much consumers are gonna be pulling back. There are a lot of indicators that we're looking at that inflation is hitting people, you know, not necessarily within the luxury space, but in a lot of other sectors. So it is a bit of a challenge. And if you're gonna pull back somewhere, you're gonna pull back on these platforms that you maybe have a smaller bit of your budget assigned to like a Pinterest or a Snapchat. And that's part of the problem for snap right now. So even amid an inflationary environment, the highest that we've seen in about 40 years, are people still going to search and our social platforms still growing, are we still seeing growth on some of these platforms, like a snap instagram and Tiktok, I mean in short, Absolutely. But the key thing is is that it's not the growth that anybody expected or would have wanted to see in the past quarter. So you know, we're forgetting the fact that snap technically did grow right. It just grew up in single digits, which was the first time ever. I believe that it had done that for a quarter and that's obviously a bit of a problem. You know, if you look at some of the upcoming companies, twitter obviously is TBD in terms of what we have those numbers but but you know, meta is coming out very soon and that's gonna be one that a lot of people are gonna be watching. Although I will say a lot of marketers have performance marketing budgets that they've assigned to meta, you know, particularly with facebook and instagram and as a result it's been so beleaguered This year but hopefully there are some indicators that they might be able to turn things around ever so slightly. Yeah. What is the outlook in terms of the expectation as to when things might be turning a quarter? I'm sure a lot of it probably does have to do with the general economic sentiment, but is the expectation that 6 to 12 months from now we might be in a different place. I mean, absolutely. I think one of the key things that from all of the brands that we're talking to is that there are some brands that just say, listen, this is a recessionary, you know pull back environment, although it's not really like ones that they've seen before right because there are some strange positive indicators at the same time that they're all of these negative ones and it's not really so comparable to the great recession or to the co shutdowns or the dot com bust of nearly about 20 years ago. So it's a very, it's a very strange environment where marketers are trying to figure out exactly how much to pull back and that's why they're trying to focus on what works. And that's why actually alphabet is poised to do a little bit better because as you said, people are still searching and that's somewhere where marketers are going to continue to spend. Is Tiktok still the creme de la creme at the top place where people want to be both marketers and users, users absolutely marketers to some extent. And Tiktok has spent a lot now on acquisition. They're releasing a lot of new ad formats that marketers are going to want to trial over the next few months, particularly during the holiday season. But I think one of the key things to watch out for there is, you know, we're looking at our forecast that we release for Tiktok ad revenues and we're looking at that very closely, there are a number, A number of different indicators that are suggesting that that number might not necessarily be as strong as we had initially predicted. So we're not restating that number yet. But we are looking very closely at that. Here's another question, how does Twitter fit into this Elon Musk had to take over at Twitter wants to turn into the so called everything at monetize it more but lay off about 75% of staff. What's the future for Twitter? The future for twitter is besides being very confusing it's one of those things where we're going to know a lot more once his first moves are actually made, once he officially is at the helm and has made this purchase, you know, we'll see if it actually happens, you know, waiting for something else to happen here. But in all seriousness it's one of those things where the super app ambitions and the that he doesn't necessarily must doesn't feel that advertising has to be the be all and all probably doesn't mean great things for twitter's uh revenue as from from an advertising standpoint over the next few years, expected to be a little bit less of a brand safe environment. And especially because brands are considering should I really spend money on twitter given the fact that it is not as tied to performance as facebook properties are, it looks very hazy. It also looks very difficult to turn something into a super app. It's very easy to say that you're going to do that. But considering how many users are in north America and how super apps tend to perform a lot better in asia pacific, it's really TBD if he can turn twitter into the next week chat. Yes it is. T. V D. We'll wait to see Jeremy, you're the expert here. Thank you so much for joining. That's Jeremy Goldman, analyst at Insider Intelligence.