Social Networks Ad Sales Seen Rising Even Amid Privacy Woes

Concerns over privacy and regulation aren’t hurting Facebook and Google where it matters, their multibillion dollar advertising businesses, according to Bloomberg.

As the internet giants prepare to report fourth-quarter earnings, most industry analysts say growing consumer spending and the continued march from in-store to online commerce will keep digital advertising growing. That’s something investors are keen to see after a year of damaging headlines, congressional hearings and a painful share sell-off.

The big political and social questions surrounding Big Tech aren’t going away. But advertisers from consumer goods giants to mom-and pop-businesses still see Google and Facebook as essential tools for reaching customers. Facebook’s Instagram is doing particularly well. In the fourth quarter, ad dollars on Instagram surged 120 percent from the same period in 2017, according to Kenshoo, which coordinates digital marketing spending for other companies.

Equity analysts estimate Facebook and Google will post record revenue in the fourth quarter, which encompasses the holiday season and e-commerce bonanza of Black Friday and Cyber Monday. More than half of marketing dollars spent in the U.S. last year went to digital ads, which Google and Facebook continue to dominate.

Facebook, which reports on Wednesday, will see sales surge 26 percent to $16.39 billion. Google parent Alphabet releases results Feb. 4 and is expected to expand revenue by 21 percent to $31.29 billion, according to analysts’ estimate data compiled by Bloomberg. Another winner will be Amazon, which got into digital advertising much later but has been growing rapidly in the last two years. Amazon reports results on Thursday. Fourth-quarter revenue is expected to be $71.93 billion, up 19 percent from a year earlier.

Twitter is also expected to keep growing revenue at a solid clip as it gets better at selling video ads and advertisers see it as a viable place to diversify some of their spending. The average analyst estimate has the company reporting $869.1 million in revenue, up 19 percent from a year earlier.