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Rani Molla

Meta: GenAI ad tools are good for small businesses while ad agencies continue working with large brands

Every time a Big Tech company like Meta announces a new generative-AI ad tool, the stocks of the biggest ad agencies — Omnicom, WPP, Interpublic, Publicis — fall.

But on Meta’s latest earnings call, CEO Mark Zuckerberg poured some water on the idea that such tools will spell the end of ad agencies — much like our article from a few weeks ago.

On Meta’s suite of generative-AI ad creation tools, he said:

“This is going to be especially valuable for smaller advertisers with limited budgets, while agencies will continue the important work to help larger brands apply these tools strategically.”

Later, CFO Susan Li said:

“We’re also continuing to see strong adoption of image expansion among small- and medium-sized advertisers, which speaks to how these tools help businesses who have fewer resources to develop creative. With larger advertisers, we expect agencies will continue to be valuable partners in helping apply these new tools to drive performance.”

There ya go!

But on Meta’s latest earnings call, CEO Mark Zuckerberg poured some water on the idea that such tools will spell the end of ad agencies — much like our article from a few weeks ago.

On Meta’s suite of generative-AI ad creation tools, he said:

“This is going to be especially valuable for smaller advertisers with limited budgets, while agencies will continue the important work to help larger brands apply these tools strategically.”

Later, CFO Susan Li said:

“We’re also continuing to see strong adoption of image expansion among small- and medium-sized advertisers, which speaks to how these tools help businesses who have fewer resources to develop creative. With larger advertisers, we expect agencies will continue to be valuable partners in helping apply these new tools to drive performance.”

There ya go!

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Amazon closes at all-time high

Fresh off strong earnings Thursday, Amazon saw its stock price end the week at a record closing high of $244.22.

The stock is up 10% so far this year.

The e-commerce and cloud giant beat analysts’ revenue and earnings, and its massive gain was responsible for more than all of the positive return delivered by the SPDR S&P 500 ETF on Friday.

tech
Rani Molla

Google uses an AI-generated ad to sell AI search

Google is using AI video to tell consumers about its AI search tools, with a Veo 3-generated advertisement that will begin airing on TV today. In it, a cartoonish turkey uses Google’s AI Mode to plan a vacation from its farm before it’s eaten for Thanksgiving.

Like other AI ad campaigns that have opted to depict yetis or famous artworks rather than humans, Google chose a turkey as its protagonist to avoid the uncanny valley pitfall that happens when AI is used to generate human likenesses.

Google’s in-house marketing group, Google Creative Lab, developed the idea for the ad — not Google’s AI — but chose not to prominently label the ad as AI, telling The Wall Street Journal that consumers don’t actually care how the ad was made.

Google’s in-house marketing group, Google Creative Lab, developed the idea for the ad — not Google’s AI — but chose not to prominently label the ad as AI, telling The Wall Street Journal that consumers don’t actually care how the ad was made.

tech
Rani Molla

Amazon, Alphabet, Meta, and Microsoft combined spent nearly $100 billion on capex last quarter

The numbers are in and tech giants Amazon, Alphabet, Meta, and Microsoft spent a whopping $97 billion last quarter on purchases of property and equipment. That’s nearly double what it was a year earlier as AI infrastructure costs continue to balloon and show no sign of stopping. Amazon, which reported earnings and capital expenditure spending that beat analysts’ expectations yesterday, continued to lead the pack, spending more than $35 billion on capex in the quarter that ended in September.

Note that the data we’re using here is from FactSet, which strips out finance leases when calculating capital expenditures. If those expenses were included the total would be well over $100 billion last quarter.

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