1) .Snap has the ability to leverage the entire sector. This is related to the nature of Snap's advertising. Most publishers are large enterprises, mainly brands, and they are high-quality customer resources in the advertising industry. At the results conference, management blamed the results on the macroeconomic slowdown. If this is the reason, the second-quarter results of Meta and Google are even more worrying, because the ratio of these two companies serving SMEs is not low, and SMEs are also more affected by the macro environment. I watched Carnival Cruise CCL some time ago. The financing interest rate for the new bonds issued by the company has reached 10.5%. It also reflects the difficult financing environment for small and medium-sized companies. In this environment, it will definitely be possible to cut advertising expenses.
2). Poor advertising performance is less likely to be associated with competition. As can be seen from the trend chart below, the overall competitive pattern of social apps has been stable since the beginning of the year. Snap users in North America have peaked, and are now actively expanding overseas markets. There is nothing wrong with the company's fundamentals.
3). In terms of industry outlook, GroupM expects US advertising growth of 8.4% in '22, excluding US political ads. Because the advertising industry is a weather vane for the economic cycle, if we judge that the US is in a moderate recession, then the second and third quarters will be the worst earnings season, and there will be a large number of political ads for the US midterm elections starting at the end of the third quarter, which will support the advertising industry.
There isn't enough data to indicate that the US will fall into a deep recession, and I'm now more inclined to moderate...