Deutsche Bank finds digital ad spending stronger than expected

Investing.com -- Deutsche Bank reported that digital advertising spending improved through the third quarter and is tracking better than advertisers initially expected into the fourth quarter, according to two recent ad-check calls with industry participants.

One participant oversees several billion dollars of annual media investment. The calls covered most major digital advertising platforms.

AI-driven improvements in targeting, click-through rates and conversion are supporting advertiser returns even as cost per thousand impressions accelerate. Declining organic search traffic is forcing brands to replace free acquisition with paid traffic.

Meta Platforms (NASDAQ: META) and Alphabet (NASDAQ: GOOG) received the strongest commentary. Meta continues to benefit from better campaign performance, a more valuable mix of Reels and Stories inventory, accelerating CPMs and growing adoption of its AI tools.

One agency reported that Meta's two-year growth stack accelerated and finished approximately 200 basis points ahead of initial expectations. The agency raised both fourth quarter and first quarter forecasts. A second check pointed to year-over-year spend growth accelerating approximately 200 basis points through the third quarter.

CPM growth at Meta accelerated approximately 350 basis points sequentially in the third quarter after accelerating roughly 650 basis points in the second quarter.

Google Search spend decelerated approximately 300 basis points and finished roughly 100 basis points below one expert's initial forecast. Paid-click growth accelerated around 50 basis points and conversion growth also improved around 50 basis points.

AI Overviews, AI Mode and zero-click results keep more of the research journey within Google, reduce organic referrals and increase the amount advertisers spend to hit acquisition targets.

Amazon.com (NASDAQ: AMZN) total advertising spend decelerated but finished roughly 100 basis points ahead of initial expectations. DSP and video continue to grow at elevated levels, while Sponsored Products growth decelerated approximately 100 basis points in the third quarter.

Reddit (NYSE: RDDT) spend growth decelerated against a difficult comparison but finished roughly 300 basis points ahead of plan. The expert raised the fourth quarter forecast by approximately 400 basis points.

Pinterest (NYSE: PINS) spend trends finished ahead of expectations. One expert saw growth decelerate approximately 500 basis points but finish roughly 200 basis points ahead of initial outlook, while another saw growth accelerate approximately 500 to 800 basis points.

Snap (NYSE: SNAP) spend growth accelerated approximately 100 basis points and finished roughly 200 basis points ahead of initial expectations.

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