TD Cowen: '2Q26 Digital Ad Expert Call: Resilient Consumer Continues to Drive Ad Spend'
The analyst commented: "2Q26 Digital Ad Expert Call: Resilient Consumer Continues to Drive Ad Spend; Our 2Q digital ad check call suggests continued solid growth across major digital platforms, reflecting a resilient consumer despite macro shocks. GOOG Search spend growth of +14% y/y matched 1Q despite a 2 pt tougher y/y comp. Meta spend was +11% y/y vs +13% y/y in 1Q; meanwhile, AMZN Sponsored Products spend accelerated to +38% y/y vs +21% y/y in 1Q while DSP grew 67% y/y.
Agency Color: We spoke with an ad expert from a Digital agency that runs $4BN+ / yr in managed ad spend, including $1.5BN+ on Google Search, $1BN+ on Social channels, $500MM + on AMZN / Other Commerce Media, & the remainder spread across other Video & Display platforms. The agency serves hundreds of clients, with a focus on eCommerce & retail brands. Our expert's 2Q data runs through the end of June.
2Q26 Google Search Spend Growth Remains Robust, Led by Clicks: Search spend was +14% y/y, in line w/ 1Q26 growth rate; clicks growth decel'd slightly to +13% (vs +14% in 1Q26), while AMZN's cont'd absence from Google Shopping auction (uncomped until 3Q26) likely helped his agency's y/y performance, in our view. Meanwhile, CPCs turned pos. y/y in 2Q26, +1% y/y vs flat in 1Q26, and GenAI is still not impacting his agency's ad interactions. YouTube ad spend grew 15% y/y vs +20% in 1Q26, reflecting slower impressions; CPMs improved to (3%) y/y vs (21%) in 1Q26.
Meta Spend Growth Decelerates Slighty on Tougher Comp: 2Q26 META spend at our expert's agency grew 11% y/y, slowing vs +13% y/y in 1Q26 amid a 1pt tougher comp. This reflects impressions +2% y/y, vs +17% y/y in 1Q26, and pricing +10% y/y, improving vs (3%) y/y in 1Q26. Meta results include Core FB spend growth of +7% y/y, vs +4% in 1Q, and IG spend growth of 17% y/y, vs 28% y/y in 1Q. Our expert noted that Reels accounted 35% of IG impressions, ahead of Reels' share of Facebook impressions at 28%. Core FB typically comprises ~62% of our expert's Meta spend, while IG & audience networks make up 37% & 1%, respectively.
AMZN Sponsored Products & DSP Spend Remain Robust: Our expert noted accelerating growth in Sponsored Products and Amazon DSP spend among advertisers in 2Q26, up 38% and 67% y/y, respectively, and supported by a Prime Day sales event that moved from 3Q in '25 to 2Q in '26. Excluding Prime Day, our expert believes that Sponsored Products and DSP spend growth would have been 23% and 56% y/y, respectively, both accelerating vs 1Q levels. Sponsored Products CPCs rose 1% y/y in 2Q26, vs +2% y/y in 1Q, while clicks grew 37% y/y, accelerating vs +19% y/y in 1Q. DSP results were driven by a 60% y/y increase in impressions and a 4% y/y increase in pricing (reflecting strength in Prime Video ads)."