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Online Ad Slump Won’t Be a Blip for Google, Facebook, Others

Online advertising already wasn’t having a great year. But things are getting worse, and Wall Street may be underestimating just how much so.

The combined weight of macroeconomic factors such as rising interest rates, the war in Ukraine and growing inflation took some wind out of the online ad market in the first quarter. And the situation has grown even more fraught since, with inflation alone jumping to a multidecade high in May. Snap Chief Executive Evan Spiegel said in late May that “the macroeconomic environment has definitely deteriorated further and faster than we expected,” causing the company to warn that revenue and pretax earnings for the second quarter were coming in below the forecast it gave just a month earlier.