Digital-ad giants Google, Facebook, Amazon come down from pandemic highs

An ad-revenue slowdown comes as consumer behaviors resume pre-Covid patterns The supercharged advertising growth that some of the world’s largest technology companies reported during the pandemic is decelerating.

A round of tech earnings last week made it starkly clear that the Covid-led surge in digital advertising has begun to ease. The slowdown was caused by a confluence of events, including inflation fears, supply-chain shortages, the war in Ukraine, a gradual return to normalcy two years into the pandemic, the continued rise of TikTok and Apple Inc.’s recent privacy changes. “We have not seen a collective set of headwinds for advertisers like this since the early 1980s," said Michael Nathanson, an analyst at MoffettNathanson.

The three largest digital-advertising players in the U.S.—Google parent Alphabet Inc., Facebook parent Meta Platforms Inc. and Amazon.com Inc.—last week said ad revenue in the first three months of 2022 grew by 22%, 6.1% and 23%, respectively, from a year earlier—down sharply from the 50%-plus increases they experienced at some point last year.

Facebook’s overall revenue growth was the slowest it ever posted since going public in 2012. “Digital is holding on to its gains, but is not growing as quickly as it grew during the pandemic," Mark Read, the chief executive of the world’s largest ad-holding company, WPP PLC, said in an interview last week.