While AI spending is top of mind, online ads are driving a lot of Big Tech’s growth

As tech giants increase their already breathtaking spending on artificial intelligence, their respective digital advertising businesses have also gained momentum.

Quarterly earnings reports this week from Meta, Amazon, Alphabet and Microsoft all showed healthy revenue on the ads front.

The rising online advertising sales have allayed concerns earlier this year that economic turbulence, amplified by President Donald Trump’s trade policies, would negatively impact ad budgets.  

“I think the digital ad market is strong,” said Jasmine Enberg, co-founder of Scalable, a creator economy media firm. “I think this economic instability and volatility is kind of priced in for a lot of people at this point; sort of seems to be the status quo.”

Meta topped its rivals for the quarter with the fastest ad-related sales growth.

The company’s total third-quarter revenue, of which 98% is derived from online ads, jumped 26% year-over-year to $51.24 billion, the company’s highest sales since the first quarter of 2024.

Revenue in Amazon’s online ad unit soared 24% year-over-year to $17.7 billion, representing a faster growth rate than the company’s AWS cloud computing unit, which saw sales rise 20%.

CEO Andy Jassy highlighted on Amazon’s earnings call that the company is continuing to expand its ad-specific demand-side platform to more third-party apps and sites.

“You look at some of the partnerships that we’ve done, the Roku partnership gives us the largest connected TV footprint in the U.S.,” Jassy said. “And you layer on top of that what we’ve recently done in providing our DSP customers the opportunity to integrate with the ad inventory in Netflix and Spotify and SiriusXM, it’s powerful.”

Alphabet’s overall advertising sales for the third quarter came in at $74.18 billion, a 13% increase from $65.85 billion a year ago. Third-quarter online ad sales for YouTube rose 15% to $10.26 billion.

Microsoft’s search and news advertising unit brought in $3.7 billion in the company’s fiscal first quarter, a 14% increase from the $3.2 billion it recorded the previous year.

Even if there’s been some pullback in ad budgets due to economic uncertainty, it’s likely that companies shifted some of that spending from traditional businesses like newspapers to digital ad platforms, said Jeremy Goldman, senior director of content at Emarketer.  

“I think what could be happening is more of a no-brainer,” Goldman said. “To put your money in social, and to put your money in retail media and to put your money in search ad spending.”

It wasn’t just the megacaps that showed hefty online ad growth this week.

Reddit on Thursday reported a 68% jump in third-quarter sales, soaring past analyst estimates. The company said global daily active uniques grew 19% year-over-year to 116 million, surpassing estimates of 114 million.

Snap and Pinterest are scheduled to report results next week.