Meta’s ad revenue surges 26%, outpacing Google’s growth
Meta's advertising business grew more than twice as fast as Google's in the third quarter, with its ad revenue now within $290 million of Google's flagship search ads.
For two decades, Google and Facebook split the internet's ad money, with Google typically taking the larger share. That arrangement is being renegotiated as Meta's advertising performance accelerates dramatically. The company's total revenue reached $64.6 billion for the quarter, a 26% jump from the previous year, with advertising accounting for nearly all of this growth at $63.061 billion.
The growth came from two directions: ad impressions rose 10%, while the average price per ad climbed 14%. Meta attributes these gains to its artificial intelligence investments, which have improved engagement, recommendations, and monetization across its platforms.
The Numbers Behind the Split
Alphabet reported total revenue of $127.6 billion, up 25% year over year. However, its advertising revenue growth was more modest at approximately 10.6-11%, with Search and other ads bringing in $63.35 billion (up 12%) and YouTube ads contributing $11.21 billion (a 9% gain).
When comparing the two companies' core advertising businesses, the race appears remarkably tight. Meta's ad business pulled in about $63.1 billion, while Google Search and other ads generated $63.35 billion – a difference of just $290 million.
AI's Impact on the Ad Market
Meta's success story appears straightforward: increased AI investment leads to better targeting, higher ad prices, and rising revenue. The 14% jump in average ad pricing particularly indicates that brands are seeing measurable returns on their investments.
Meta's 26% ad growth versus Google's roughly 11% suggests that AI may be reshuffling winners and losers inside a market that once looked locked in place.
Google faces challenges as chatbots offer users new ways to find information, potentially reducing reliance on traditional search where the company generates much of its revenue. Despite this, Alphabet noted that AI has driven its highest Search query growth rate in five years.
While Alphabet's core advertising segment slowed compared to previous periods and fell short of some analyst expectations, the company remains significantly larger overall, with total revenue nearly double Meta's. The competitive dynamics in digital advertising continue to evolve rapidly as both companies invest heavily in AI technologies.
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