Research firm MoffettNathanson cut its 2025 revenue
estimates for each of the four companies by double-digit percentages.
US digital ad spending surged 38 percent in 2021 over the
previous year. Alphabet, the largest digital advertising platform in the world,
posted record revenue of $257 billion that year.
While the companies have warned of pressure from inflation,
the Ukraine war and the end of a COVID-induced lift to advertising, the report
estimates for the first time the potential impact to revenue over the next few
years.
"After years of uber-bullishness, we are truly
concerned about longer-term growth in digital advertising," wrote Michael
Nathanson, an analyst at MoffettNathanson, in the report.
Growth in the advertising market last year was driven in
part by an "unprecedented spike" in profitability at companies that
saved money on office space and expansion and had more to spend on marketing,
as well as brands spending on ads to drive customers to shop online, Nathanson
wrote.
But e-commerce as a percentage of retail sales has fallen
back to pre-pandemic levels, and corporate expenses are likely to rise as
workers return to the office, according to the report.
The firm said it now expects online advertising in the
United States to grow by 12.5 percent annually through 2025, down from the
previous estimate of 18.5 percent annual growth. © Reuters