Meta is making a change to its advertising algorithm that will make the platform temporarily look like it’s performing worse for some advertisers. The change could raise ad prices but also increase advertisers’ trust in the fidelity of Meta’s ad systems, ADWEEK has learned.

The change affects conversion campaigns where a marketer wants someone to make a purchase. Meta will now give more weight to the conversions occurring one day from when a user first clicks, specifically looking at the one-day conversion window. A conversion window is the time between when a user sees an ad and completes an action.

Shorter conversion windows are harder for platforms like Meta because they have less time to prove their ads worked. With longer conversion windows, like a seven-day window, there is more likelihood that a user purchased for reasons outside of the ad.

Previously, the algorithm behind conversion campaigns was equally weighted toward all lengths of conversion windows.

“This ads ranking change will more heavily favor 1 day click conversions, whereas previously, all attribution windows were weighted evenly,” according to a note digital agency Wpromote sent its clients about the change, which was seen by ADWEEK. “From early testing, Meta has seen an average 30% improvement to Meta-attributed conversions in third-party analytics tools. However, this also means that Meta’s in-platform data will be impacted, with the likelihood of decreased conversions reported, along with potentially higher CPAs and CPMs.”

With more conversions only counted by Meta if they happened within one day of seeing the ad, advertisers might see fewer conversions reported for a given campaign than they did previously. Ad prices also might be higher because the change will cause Meta to target a smaller pool of users, looking for those who are more likely to convert in one day.

Advertisers who hadn’t already been optimizing for one-day conversion windows or who sell luxury products with longer purchase windows are more likely to see ad performance decline, said Darren D’Altorio, vice president of social media at Wpromote.

The change is significant because Meta typically doesn’t tell advertisers much about how its algorithm works. Brands have also recently been increasingly skeptical of how Meta measures its ads, ADWEEK has reported.

“We are super excited about these updates,” D’Altorio said. “This is an exciting update for performance advertisers who validate results with third-party measurement tools (which most do) and illustrates that Meta consistently leads the pack as it relates to adtech innovation.”

Separately, Meta announced a slew of changes on Aug.14 to its ad system around how it optimizes and measures conversions. The greater weighting of the one-day attribution window is not directly mentioned in Meta’s blog post, though it was part of how these changes were explained to advertisers, according to D’Altorio.

“With today’s updates we expect advertisers, especially those who use third-party analytics tools, to see improvements in Meta-attributed conversions,” a Meta spokesperson said in response to questions about the role of the one-day attribution window in its ads algorithm. “As the holiday season approaches, our goal is to continue to help improve advertiser performance and deliver more of the results they value.”

Meta did not respond to comment on the change in the weight of a one-day conversion window.

More incrementality and comparison with third parties

Besides the change to conversion windows, Meta is also making changes that show advertisers how many users took an action on an ad as a result of specifically seeing it on one of Meta’s platforms.

When Apple deprecated mobile identifiers in 2021, Meta had less data about who to target and how to measure whether those ads worked, causing ad performance to plummet.

In the past three years, Meta has solved this problem with AI which has improved performance, but advertisers worry the campaign reports Meta gives are more modeling than reality. They worry that the modeling makes Meta ads look like they perform better than they do.

Meta’s updates to its ad systems could alleviate those concerns.

Meta is now allowing advertisers to optimize for incremental conversions. A user who scrolled past a Meta ad for shoes might have bought the shoes anyway, but an incremental conversion would represent a customer brought in uniquely by the ad.

Meta calculates incrementality by comparing conversions from a group of people exposed to an ad to conversions from people who didn’t see any advertisement. The difference between the two helps figure out how many conversions were incremental.

Incrementality testing is a big reason why ad buyers have been turning to third-party measurement solutions like Rockerbox, TripleWhale, and Measured.

Another reason advertisers have turned to these vendors is to figure out which platform is most responsible for a sale. A user could have seen an ad for a product on Meta, TikTok, and Google before making a purchase, and each platform could be taking credit for driving the sale.

Now, advertisers can connect these third parties with Meta, starting with Google Analytics and Northbeam. Meta will soon expand similar tools to Adobe and Triple Whale. Meta will use this data in campaign optimization to improve its relative campaign performance.

“One of the biggest criticisms of Meta, specifically from performance advertisers, is that its in-platform attribution is wildly inaccurate compared to a third party ‘source of truth,’ ” D’Altorio said. “These changes will better calibrate their ad system to close that gap.”

Meta has already started to use some preliminary third-party data from early tests with advertisers to make changes to its overall advertising algorithm.

“We would like our system to be customized to deliver [advertisers’] specific way they think their media performs. We’re not there yet,” Fred Leach, vp of product management, told ADWEEK. “That’s ultimately what the connection with third-party analytics tools should allow us to do. But right now, we’ve gained enough aggregate learning where we can tune the system to where, on average, we believe it’s going to deliver more value for advertisers”

Correction: The headline on an earlier version of this article misstated that Meta was changing how conversions are measured. The headline has been updated to reflect that Meta has changed how its algorithm is optimized. This article has been updated to clarify that the change affects campaigns only where a marketer wants someone to make a purchase, not for app download conversions. And to reflect that Meta will now give more weight to the conversions occurring one day from when a user first clicks.

On this episode of the Brave Commerce podcast, hosts Rachel Tipograph and Sarah Hofstetter sit down with Axel Adida, chief digital officer at German skincare and hygiene giant Beiersdorf, to discuss the evolving landscape of global commerce. 

Adida, who brings a wealth of experience from his time at L’Oréal and Sanofi, shares insights into the seismic shifts reshaping the beauty and health industries. From the enduring power of great brands to the explosion of digital media and the rise of data-driven marketing, Adida offers a comprehensive look at the forces driving today’s consumer behaviors.

He also dives into the unique dynamics of the Chinese market, explaining why it’s a bellwether for global trends. He explores how China’s digital ecosystem, particularly the dominance of platforms like WeChat and the boom in livestreaming, sets the pace for innovation in commerce. The conversation touches on the challenges and opportunities of translating these trends to other regions, and the nuances that make certain strategies succeed in one market while struggling in another.

Finally, the episode delves into the concept of the “desire economy,” where luxury and beauty brands thrive by creating products that consumers don’t just want, but deeply desire. Adida discusses how today’s consumers engage in an endless loop of inspiration, exploration, and community interaction, reshaping the traditional marketing funnel.

With influencers now playing a pivotal role in purchasing decisions, Adida offers a fresh perspective on how brands can navigate and leverage this new landscape to build lasting connections with their audience.

Key takeaways:

Global Digital Transformation: Explore the fundamental shifts in digital media, data-driven marketing, and consumer engagement that are transforming the global commerce landscape.

China’s Influence: Understand the unique role of China as a trendsetter in digital commerce, and how its rapid innovation cycles provide valuable lessons for other markets.

The Desire Economy: Learn how luxury and beauty brands are capitalizing on the “desire economy,” where consumer motivation is driven by a deep connection to brand values and social validation.

Susan Wojcicki, former YouTube CEO and prominent tech leader, died at 56 after two years of living with non-small cell lung cancer.

“It is with profound sadness that I share the news of Susan Wojcicki passing,” wrote her husband, Dennis Troper, on Facebook on Friday. “My beloved wife of 26 years and mother to our five children left us today after two years of living with non-small cell lung cancer.”

Over the weekend, the tech community has been mourning her passing and celebrating her achievements.

Wojcicki joined YouTube as CEO in 2014, leading the company for nearly a decade before stepping down in February 2023 to “start a new chapter focused on my family, health, and personal projects I’m passionate about.” On stepping down, she said she’d continue working with YouTube teams, coaching members and meeting with creators.

But her influence stretches far further back.

Wojcicki was instrumental in helping build Google in its early years, and she has been credited with shaping some of its most successful products, including co-creating publisher monetization program AdSense, wrote CNBC.

In 1998, to help cover her mortgage, Wojcicki rented her Menlo Park, Calif., garage space for $1,700 per month to two Ph.D. students at Stanford University, Google founders Larry Page and Sergey Brin.

At the time, Wojcicki was working in the marketing department at Intel. But after recognizing its early potential, she joined Google in 1999 as its 16th employee, moving up the ranks, growing the platform’s consumer and analytics products, and building its advertising business.

Besides growing two tech titans, Wojcicki was devoted to improving the workplace for women and parents, being the first to take parental leave at Google and advocating for policies in the workforce, wrote NPR.

“Susan always put others first, both in her values and in the day-to-day. I’ll never forget her kindness to me as a prospective ‘Noogler’ 20 years ago,” Google CEO Sundar Pichai wrote in a statement Saturday. “During my Google interview, she took me out for an ice cream and a walk around campus. I was sold—on Google and Susan.”

In 2006, Wojcicki advocated for Google’s then-$1.65 billion acquisition of YouTube and oversaw its rapid expansion over the past decade, as well as navigating the platform’s battles controlling hate speech, misinformation, and inappropriate content.

“I had the good fortune of meeting Susan 17 years ago, when she was the architect of the DoubleClick acquisition,” wrote current YouTube CEO Neal Mohan in a social media post Friday night. “Her legacy lives on in everything she touched at Google and YouTube.”

“As one of the most important women leaders in tech—the first to lead a major company—she was committed to expanding opportunities for women throughout Silicon Valley,” former Meta chief operating officer Sheryl Sandberg wrote in a social media post. “I don’t believe my career would be what it is today without her unwavering support.”

“She was one of Silicon Valley’s visionaries and she will be missed by so many,” Apple CEO Tim Cook wrote on X. “May she rest in peace.”

GARM, the Global Alliance for Responsible Media, is shutting down due to an antitrust lawsuit being brought against it by Elon Musk and X, as reported by Business Insider.

GARM is a cross-industry initiative established in 2019 by the World Federation of Advertisers (WFA) to help the industry address the challenge of illegal or harmful content on digital media platforms and its monetization through advertising.

​​The WFA told its members today that it was “discontinuing” activities for GARM following the lawsuit filed against the company earlier this week.

In an email to WFA members, according to Business Insider, CEO Stephan Loerke said the decision was “not made lightly,” but since GARM is a not-for-profit organization it has limited resources and would not be able to fund itself against the social media giant’s lawsuit.

The WFA will contest the allegations against GARM members, which include CVS, Mars and Unilever, and believes the outcome of the case would “demonstrate our full adherence to competition rules in all our activities.”

The lawsuit had already been a source of much contention in the industry, with media buyers reconsidering their willingness to buy ad space on X, with Musk going into battle mode, saying, “We tried peace for two years, now it’s war” as he reposted CEO Linda Yaccarino’s bizarre video announcing the lawsuit.

In a statement provided to ADWEEK, Claire Atkin, co-founder of adtech watchdog group Check My Ads, said, “Advertisers know a bad ad placement when they see one. The reality is today’s decision means even more advertisers will flee X, and quickly so they’re not targeted in the future.

“Everyone can see that advertising on X is a treacherous business relationship for advertisers,” she added. “And we know, based on public reporting, X doesn’t have all that many too lose.”

There’s no word yet on what will happen to initiatives that began under GARM. Last year, the group and Ad Net Zero unveiled a plan to address media’s climate impact: The GARM Sustainability Action Guide to Reduce Media Greenhouse Gas Emissions.

Reddit’s quest for advertiser performance budgets has kicked into high gear.

The platform reported second-quarter earnings of $281 million, largely driven by growth in non-endemic verticals and spending from small and midsized businesses, putting it on track to generate $1 billion this year.

And artificial intelligence is going to further power the performance of those ads.

Last week’s acquisition of creative AI startup Memorable AI (which went from founding to strategic exit in three years and counts clients like Hellmann’s, Katana and NotCo) for $19.9 million will let buyers identify, test and serve the predicted best-performing creative across Reddit’s environment.

Chief operating officer Jen Wong reveals the strategy behind the Memorable acquisition, plus how it can grow to a $2 billion ad company, (and rival the ad revenue of Pinterest and Snap, per eMarketer).

This interview has been edited for clarity and brevity.

What’s driving you to $2 billion in ad revenue?

It’s the work that we’re doing. I feel really good about our strategy. We can still make the ad platform easier and more automated. There’s a lot of headroom in performance. Yes, we doubled click volume, but [we can] improve our models and signal collection even more to drive efficient conversions and volume of conversions for advertisers.

You see us testing ads in comments. That’s very, very early. It’s a very important, high-intent page, not a contributor to our revenue, but that’s an opportunity for us, in addition to other spaces on Reddit, like search. We continue executing against our strategy, which is to be the leader in contextual and interest advertising, to be a full-funnel solution for advertisers large, midmarket and SMB, and there’s a lot of headroom.

There are a ton of creative AI startups. What was special about Memorable AI?

We’re always looking at [developing] pieces of our ad stack. We were planning to organically invest in insights related to the best creative. Memorable is one of the leaders in this area. It’s an expert in understanding what kind of creative can really drive action and outcomes for advertisers.

We’ve done a number of these acquisitions very successfully—Spiketrap was one—where we bolt them onto our company. In this case, we have technology, as well as talent. Starting next year, we’ll be able to see the benefits of that integration

There’s so much hype around AI. What tangible outcomes did you find while scoping out Memorable?

That was a big part of our evaluation and due diligence, actually talking to customers and looking at case studies of the impact of those who work with Memorable. It has an excellent reputation for driving value for advertisers, giving very specific insights into creative organization.

That’s a great opportunity for driving performance for advertisers, as well as, frankly, automating part of the campaign setup and onboarding process.

Has news of the acquisition prompted any new buyers to get in touch?

There’s excitement about it, and some of our customers are their customers, so it makes a lot of sense for them. They’ve already had positive experiences, so they’re excited that this will become just the core capability. It’s been really positively received.

Can you quantify the impact of AI on Reddit’s business?

We’re slowly adding pieces like the AI-generated headlines. Then there are the raw productivity tools that make the productivity of our sales team even better.

We do watch productivity metrics. We do watch revenue per sales, FTE [full-time equivalent] and the productivity of our teams, how many accounts they can handle, etc. We have seen that grow, and there’s a lot more headroom.

Are there other AI acquisitions on the horizon?

We will continue talking and looking at companies that can accelerate our roadmap.

Other revenue in your earnings grew by 690% year over year to $28.1 million, nearly 10% of your total profit and loss, thanks to deals with Google and OpenAI to license Reddit data for their AI products. Do you want to do more deals with AI search engines?

AI is a nascent tech that will be transformational. We believe in the open internet and users getting access to information. What’s happened is that the world of search and AI and data all collided, so it’s become more complicated. We have said publicly that we are stewards of Reddit’s data, and if you want to use Reddit data, we need to have a conversation about that. We are open the partnerships. We’ve actually done a lot of partnerships, big and small, over the past six months.

It’s hard for me to say how many more will be able to do because what’s important is being able to come to an alignment about Reddit’s terms and policies, as well as commercials.

Do you plan to grow the portion of revenue coming from licensing deals? The danger is being reliant on companies cutting you checks, and then those checks stop coming.

There is an enormous runway and headroom for our advertising business. The addressable market for our users is everybody—those we’ve been building for years and we have a lot of control [over].

It’s a very uncertain landscape. We don’t know with the future holds. We’ve done medium-term deals—not one year but not forever—because this landscape is moving so quickly. So we’re very conscious and we’ve been very thoughtful about that. But the advertising business is our core.

X is back to warring with advertisers, and advertisers are back to executing caution when engaging with the platform, buyers told ADWEEK.

Two buy-side sources who have advertised on X this year said X’s new lawsuit against the Global Alliance of Responsible Media (GARM), an advertising trade body, makes them reconsider future investment in the platform.

X today filed a lawsuit against GARM, the World Federation of Advertisers (of which GARM is a subsidiary), and GARM members CVS Health, Mars, Orsted and Unilever for using their influence to inspire brands to boycott X and depriving the platform of ad revenue. GARM is an industry organization that was formed in 2019 offering standards and guidelines to help brands avoid monetizing illegal or harmful content on digital media platforms.

X owner Elon Musk said on the platform today, “We tried peace for 2 years, now it’s war,” as he reposted CEO Linda Yaccarino’s bizarre video about the lawsuit.

This is an about-face from Musk’s conciliatory presence at the Cannes Lions Festival earlier this summer, where he called brand safety “critical,” and said that “advertisers have a right to appear next to content that they think fits with their brand.”

One buy-side source, who is not authorized to speak with the media on the record, said a brand they work with had paused advertising on X last year after Musk made antisemitic comments in November but returned to the platform this year as the dust settled around that controversy.

“A lot of brands had slowly warmed back up,” to advertising on X, the source said, noting incentives X has given to advertisers.

Today’s lawsuit will likely change that calculus.

“Every advertiser needs to stop and think very hard right now and decide if Twitter just doesn’t fit a campaign, and [a brand is] not going to spend with them on this quarter or this initiative, is Elon going to just tell Linda Yaccarino to sue?” the buyer said. “Here’s a guy … who can fund any lawsuit forever.”

A large brand that advertised on X around the Olympics said the lawsuit would make the brand reconsider whether to even post organically on X. Their paid activation has ended.

“Why would I want to be in any way, shape or form, involved in a place that wants to sue individual advertisers and the bodies that authentically represent them for choosing to not advertise there?” the source said.

X currently takes the most time for VaynerMedia employees to monitor for their clients out of every other platform, given the myriad controversies and drama on X, said Anthony Scarola, vp of media and programmatic lead at VaynerMedia. He said today’s lawsuit is another example of the volatility of the platform, though noted the platform’s reporting on brand safety has become more granular, and thus has flagged more brand safety issues as a result.

“We’ve definitely had those conversations as to is the juice worth the squeeze?” Scarola said.

Leaving X isn’t all about brand safety

X’s lawsuit comes on the heels of a report from Republican members of the House of Representatives which found GARM limited choice for consumers by organizing to demonetize content it doesn’t favor, specifically pointing to X and conservative creators and outlets, like Fox News and The Daily Wire.

But sources said there were many reasons brands chose to stop advertising on X, starting with Musk’s takeover in 2022, that had nothing to do with politics or brand safety. Axios reported that X is supposed to make $2 billion in advertising revenue this year, compared to the $4.5 billion in revenue in 2021, the last full year X reported its earnings publicly.

First, the most successful digital media companies like Meta and Google typically attract performance budgets, which are focused on linking advertising with sales. X has never been good at this and still isn’t, the first buy-side source. “It’s never been about cost per acquisition,” they said.

Plus, at the time of Musk’s takeover, brands had concerns about X’s operational capacity that sparked a reconsideration of ad spend, said Arielle Garcia, director of intelligence at industry watchdog Check My Ads, who served as chief privacy officer at ad buying giant UM Worldwide at the time of the Musk takeover.

“You had agency reps that were just gone. You had no one to speak to about brand safety issues. The platform was in complete turmoil,” Garcia said. The first buyer source said there is more support from X reps than during Musk’s initial takeover.

“It’s interesting the way that they’re positioning all of this, when the reality is that brands were making decisions based on a whole host of different factors. Brand safety itself was only one of them,” Garcia said.

ADWEEK has requested comment from X and will update the story if the platform responds.

In its latest marketing campaign, Tinder riffs on some classic romantic comedy tropes straight out of a 1990s Jennifer Lopez flick, with adorkable, clumsy characters, chance encounters on busy city streets and rain-soaked embraces.

The message is that meet cutes happen on Tinder all the time, although maybe not exactly the way they do in Hollywood movies.

The nostalgia-steeped effort, delivered with a wink by agency of record Mischief @ No Fixed Address, would have been unthinkable before last year, when Tinder was largely considered a place for one-night stands and nothing more. The coveted demographic of young women, in fact, had derisively likened it to “a sleazy bar.”

The difference between then and now? “It Starts With a Swipe,” an Effie Award-winning campaign that dropped in February 2023 and changed the trajectory of the legacy dating application, spiking its third-quarter-2023 revenue by 11% year over year to $509 million.

As the brand’s first global work, the ads didn’t shy away from the app’s ingrained bad rep. And while that may seem counterintuitive, the goal was to show that initial human connections via Tinder, no matter how impulsive or visceral, can lead to something more meaningful.

“The real unlock on Tinder was not trying to change the perception that Tinder is a hookup app, but instead changing the perception of what a hookup can be,” Jeff McCrory, chief strategy officer and partner at Mischief, told ADWEEK. “We wanted the world we were creating for Tinder to be hopeful—young singles want to meet people, explore and see where it takes them.”

Heavy competition, high stakes

The stakes were high, with Tinder having just posted four straight quarters of declining revenue while feeling the heat from well-funded, aggressive competitors in the space like Hinge, Bumble and OkCupid.

As a prime mover in dating apps, having debuted in 2012, Tinder had carved out a high-profile place in popular culture but didn’t have a well-defined brand platform to speak to existing, lapsed or potential users, according to Stephanie Danzi, its senior vice president of global marketing.

“It was absolutely time for us to take control of our brand narrative,” Danzi told ADWEEK. “In a sense, we reintroduced Tinder to the world to prove why we matter to a new generation of singles.”

While the category had become jam-packed with looking-for-love options since Tinder’s groundbreaking entry onto the scene, dating app fatigue had also set in more recently, especially with Generation Z. 

Women in that age group had left Tinder for other apps or ditched the scene entirely. After a decade of almost consistent double-digit revenue growth, Tinder saw a decline in the first quarter of 2022, followed by a second, third and fourth.

Against that backdrop, Tinder couldn’t afford a fumble, with Danzi saying, “It’s impossible to overstate how important this was,” although Tinder’s widespread brand recognition acted as a bit of a double-edged sword.

“Because of our prominence in the space, and culture as a whole, Tinder is a bit of a lightning rod for social commentary,” Danzi said. “We’ve seen how recent brand missteps can be amplified across channels like wildfire.”

Rom-com but make it punk

After extensive brainstorming and refining, the creative team infused its approach with “a touch of whimsy,” McCrory said, “but not overly saccharine and sweet—like a rom-com/punk rock mashup. Who wouldn’t want to live in a world like that?”

The resulting campaign featured an all-inclusive cast of Gen Z daters representing the app’s core membership and the various relationship categories they fell under. They aimed to give a modern take on dating gone right, showing that users could define relationships in their own ways.

Color-saturated ads were inspired by the throwback look and feel of romance novels, complete with swirly font treatments and clever copy that heralded relationship milestones like leaving a toothbrush at a crush’s house.

One eye-catching 15-second video centered on a couple pawing each other on a nightclub dance floor but later going on a furniture shopping excursion together. The tagline: “Some Tinder dates turn into one-night stands. But some turn into two nightstands.”

Media buys were as strategic as the creative message, with Tinder blanketing social and digital channels, for obvious reasons, while also hitting streaming platforms such as Hulu, Roku and YouTube.

“It Starts With a Swipe” dropped initially in the U.S. and Europe before expanding to South America, Asia and Australia, representing more marketing firepower than the brand had ever used before. Its out-of-home ads in well-trafficked locations made a splash in major cities such as New York, Los Angeles, Berlin, Paris, London and Madrid.

Stellar outcome

Results of “It Starts With a Swipe” went far beyond expectations. Tinder’s “first choice” score rose from 22% to 36% in two months, which is 280% over the brand’s stated objective. Post-campaign, more women under 30 said they felt that Tinder was a place for “any type of relationship,” rising from 31% to 48%, 340% over objective.

Brand consideration increased by 16 points, with a 15% bump in young female consumers who said, “Tinder is a brand for people like me.”

Parent company Match Group credited the campaign with boosting user sign-ups, particularly among women and young demos, returning the brand to positive growth and overtaking competitors in brand preference.

“It Starts With a Swipe” will continue as an umbrella campaign for the foreseeable future, per the brand, with the team adding new facets and executions. 

The latest incarnation, for example, uses celebrities for the first time, with actors Lana Condor from Netflix’s To All the Boys franchise and Evan Mock from HBO’s 2021 Gossip Girl remake. Expect another push for the traditionally busy back-to-school season.

Tinder has “just warmed up our marketing muscle,” Danzi said. “We’re looking to step into culture in ways that make sense for the brand but also get people talking.”

Elon Musk and his X leadership team still have a long way to go to lure advertisers back to the platform following the owner’s bid to smooth relations at the Cannes Lions Festival last month, six sources told ADWEEK.

Musk dialed back on his 2023 provocative “go fuck yourself” comment to advertisers, explaining that X is using artificial intelligence to improve ad targeting capabilities.  

“There’s still a long way to go to get buyers back on X,” the first agency executive, who wasn’t authorized to speak to media, told ADWEEK. “What also has to happen is more tangible updates to the products, and not just lip service of ‘come back.’”

Further, Stagwell CEO Mark Penn’s comments that Stagwell is telling clients to “absolutely test advertising [on X] and see if it works” are not currently consistent with what at least one Stagwell agency is telling clients, which is to be cautious as brand safety concerns still loom, according to a second executive familiar with the matter.

“Clients have been holding back on ad spend,” the second executive said. “X doesn’t have the manpower to help agencies for direct connection, and we haven’t seen enough to have full confidence in brand safety.”

In June, X had 26.2 million daily active mobile application users in the U.S., down 13% year-over-year, according to Sensor Tower estimates. The firm also estimates that 73 of the top 100 advertisers have stopped advertising on X since October 2022, shortly before the acquisition, concerned with how the platform handles content moderation and brand safety.

Ad dollars on X dropped 20% year-over-year in 2024, from $788 million in 2023 to $628 million, per MediaRadar. The number of companies advertising on X also dipped 11% year-over-year, from nearly 12,000 in 2023 to 10,600 in 2024 during the same period.

“It’s wartime, and dollars are hard to come by in general,” the first agency executive said. “Because of brand safety issues, [not spending on X] is an easy decision to make.” Musk’s history of amplifying antitrans and antisemitic comments to his 188.6 million followers still has buyers nervous.

For its part, X has seen some brand safety developments under CEO Linda Yaccarino’s leadership, including a partnership with Integral Ad Science and DoubleVerify. The latter, however, apologized in April after erroneously providing wrong data for X to advertisers.

But with the upcoming U.S. elections, Musk’s free-speech agenda adds to the platform’s volatility, sources said.

“There’s going be a lot of [political] content on X,” said Shamsul Chowdhury, executive vice president of paid social at Jellyfish. “How does X manage that and make brands feel safe to be in that space?”

X had not responded to comments by press time.

Using a chatbot to streamline ad targeting

Details of X’s AI-powered ad targeting capabilities are scant.

Other platforms have been offering some type of AI-ad targeting for years, with Google’s Performance Max and Meta’s Advantage+ ratcheting up the most recent headlines for being effective but also not entirely transparent.

In the past month, the first agency executive was shown a preview of an AI targeting tool from X that had a similar interface to ChatGPT. Buyers can type in their target audience—for instance, people who enjoy running or are in running clubs.

“The current status quo is that you manually toggle targeting options like demographics or psychographic behavior,” the first agency executive said. “[The AI tool] is trying to make that streamlined.”

However, because not much active spending is happening on the platform through this agency, it has yet to test the tool on a live campaign.

This exec also noted that X lacks the performance-driven tools available on rival platforms such as Meta, TikTok and Snap.

“There’s no shortage of platforms for advertisers to spend their ad dollars,” said Chowdhury. “How does X make a claim for the budget when they don’t necessarily have the ad products that are competitive to their peer set?”

Ad spend on TikTok year-over-year has been growing, but that growth has cooled since a potential U.S. ban was announced in March.

Meanwhile, the platform’s user growth, especially among younger people, is flagging, according to data shared by five sources.

TikTok’s ad spend in March—the month the potential ban was announced—was up 19% year-over-year, according to MediaRadar. In the months following the announcement, that growth slightly cooled, with ad spend increasing 11% YoY and 6% YoY in April and May, respectively.

From January through May 2024, ad spend on the platform exceeded $1.5 billion, an 11% YoY increase from the nearly $1.4 billion spent during the same period in 2023.

A separate study found that nine out of 20 advertising categories saw increases in month-over-month ad spend in April 2024, according to market intelligence firm Sensor Tower.

Consumer services, which include companies like carpet cleaner Stanley Steemer and online printing service Vistaprint, had the largest increase in U.S. ad spend, up 115%, followed by jobs and education at 20%, financial services at 17% and both real estate and software at 16%.

The average daily spend on TikTok dropped by only 2% month-over-month in April 2024, per Sensor Tower.

However, four of the top 10 advertisers on TikTok reduced their spend in April compared to the previous month. That included Target (which decreased by 30% MoM), DoorDash (down 25%), Bayer (20%) and Procter & Gamble (10%).

Still, advertisers find value in TikTok.

“Until all users are gone or they’re forced to go because of the ban, there’s too much attention to ignore TikTok,” a creative agency executive told ADWEEK.

Shifting to a more performance-centric mindset

Since the potential ban was announced, some brands have shifted their focus on TikTok from upper-funnel objectives, like brand awareness, to more performance-driven return on investment goals to maximize their ad spend, according to the first agency executive.

“We’re seeing ad spend decelerate a bit YoY,” the first agency executive said. “That’s because the ban triggered more of a performance-centric mindset, and TikTok stands weaker in performance compared to Meta.”

This agency’s ad spend grew between 20% and 25% in the first quarter of 2024, dropping to about 18% YoY in the second quarter. “It’s been more resilient than you’d think,” they said.

At this agency, TikTok’s CPMs (cost per thousand impressions) for upper-funnel metrics were up by 15% year-to-date.

According to Obele Brown-West Hinsley, president of data intelligence platform Tracer, “Advertisers, as well as TikTok users, are committed.”

Looking at CPMs over the months, Tracer saw a 7% increase in March compared with February, which continued steadily through April and May, indicating growing advertiser interest and competition driving up the prices, according to Tracer.

While many platforms experienced CPM declines from May 2023 to 2024, TikTok instead saw a significant 19% YoY increase.

Additionally, user engagement on TikTok grew, with a 27% increase in click-through rates in April compared with March, per Tracer.

TikTok loses some luster in younger people

For the first time, TikTok, which boasts 170 million users in the U.S., has seen its user growth stagnate and is experiencing a notable decline in younger people.

According to YouGov, the percentage of weekly TikTok users aged 18 through 24 has fallen from 35% in 2022 to 25% in 2024. The percentage of users aged 35 through 44, meanwhile, has risen from 16% in 2022 to 19% in 2024.

During a congressional hearing in January, TikTok CEO Shou Zi Chew said the average age of a TikTok user in the U.S. is now over 30.

Daily time spent on TikTok has also seen a slight decline. According to eMarketer, average daily use dropped by 1.2% in 2024, decreasing from 52 minutes to 51 minutes.

“Overzealous users, likely young Generation Z, are spending less time on the platform than they would have 12 to 24 months ago,” said Oscar Orozco, senior forecasting analyst at eMarketer. “[And] news about a potential ban is also contributing to these declines.”

Paul Hiebert contributed to the reporting.