Sir Martin Sorrell, Executive Chairman, S4 Capital.
Eóin Noonan | sports file | Getty Images | Web Summit
Advertising giant Martin Sorrell believes meta will recover “extremely strong this year” and see a promising outlook for the US tech giants, despite a difficult 2022 and mass layoffs.
US tech companies laid off more than 60,000 employees last year as slowing economic growth, higher interest rates to cope with soaring inflation and competitive challenges have squeezed margins and slashed prices. stocks of tech giants.
Facebook parent Meta in November announced the plan laid off 13% of employees, up to more than 11,000 employees. It also gave dismal fourth-quarter guidance that wiped out about a quarter of market capitalization, pushing the stock to its lowest level since 2016.
A slowdown in online ad spend and competition from new rivals like TikTok, along with challenges related to Apple’s iOS privacy changes, have interfere with the social media team’s business in the last year.
The company has also achieved considerable success from its large investment in construction augmented reality world called metaverse — a strategy that has proven to be divisive among analysts and investors.
Sorrell, executive chairman of UK advertising agency Capital S4expects Meta to solve most of its business challenges by 2023, while also benefiting from China’s reopening.
“I think you’ll see Meta come back extremely strong this year, thanks to the spinner and business messenger, to deal with competition from TikTok and other short-form video competitors,” Sorrell told CNBC on the sidelines of the World Economic Forum in Davos, Switzerland.
“Google had a solid year last year, and I think they will have a strong year this year. Amazon grew ad revenue from $31 billion to $41 billion and I think [it] going to hit $100 billion in the near term, regardless of what you’re seeing in terms of employment and hiring.”
He also suggested that reopening China’s economy would be “huge” for big tech companies, noting that Chinese businesses go abroad or Chinese companies expand their businesses abroad. overseas, has historically been the second-largest profit center for the likes of Meta, Amazon and Google’s parent Alphabet.
Sorrell launched S4, operating in both the digital advertising and digital transformation spaces, after leaving the advertising giant WPP in 2018. S4 on Wednesday confirmed its full-year direction and Sorrell said the priority for customer ad spend in 2023 will be “top revenue growth in activations and performance” and “decreasing [the] digital transformation costs.”
