Eric Siu breaks down why big platforms like Amazon, Meta, and Google are growing ad revenue while agencies stay flat or decline. Marketing budgets are shifting toward platform ads instead of agency services, and most agencies haven't invested heavily in AI automation yet to compete.
Speaking of marketing in general and agencies, forget stock prices of Google, Meta, Amazon. I know Amazon just tanked, but when you look at their revenue, Amazon's ad business jumps 22% year over year in a bad market to $15.7 billion. If you look at Facebook and Google, they're doing extremely well on the ad side. But what's interesting is most agencies have actually, the ones at scale, are either declining or they're flat. So if you look at where marketing dollars are being spent, there's a restriction or contraction on services. There is more being spent on ad dollars for the platforms, and we're not really seeing startups to mid-sized companies really spending a ton on AI marketing. And when I mean AI marketing, I'm not talking about optimizing for ChatGPT or anything like that. I'm talking about you spending a ton of money on tools to automate and cut staff. We're not seeing that transition yet, but we are seeing companies just be more restrictive in this environment because people are just very pessimistic. And it just shows that you don't have a choice but to spend on the platforms because they control the attention.
