Social media's Q3 results look grim amid ad market slowdown

Social media's earnings will be dreadful this week.

Why it matters: Ad buyers have reduced media spend for the second half of this year. That's not good for social media companies reporting this week — like Meta and Pinterest — that heavily rely on digital ad revenue.

• Tech companies Microsoft, Alphabet, Amazon and Apple also report this week but benefit from diversified revenue, not reliant on the ad market.

Driving the news: Last week, Snap reported its slowest-ever quarter for revenue growth since going public. It declined to provide formal guidance for the fourth quarter but shared that its revenue growth will likely be flat.

• "We are finding that our advertising partners across many industries are decreasing their marketing budgets, especially in the face of operating environment headwinds, inflation-driven cost pressures, and rising costs of capital," Snap said in its investor letter. 

What they're saying: "Snap has served as something of a canary in the coal mine for tech companies this year, after warning in May that the macroeconomic environment was worsening," Alex Weprin wrote in The Hollywood Reporter.

Yes, but: Snap is still out wooing marketers. Last week, it held a cocktail party for Advertising Week attendees.

• At AdWeek, Vox Media Chief Revenue Officer Ryan Pauley told Axios it's a "mixed signal, strange market." For ad budgets, luxury and fashion "seemed OK," but CPG brands were cutting back.
• The ad business continues to attract new entrants. Uber said last week it plans to put ads in its ride-hailing app.

What's next: Microsoft and Alphabet report on Tuesday. Meta reports on Wednesday. Amazon, Apple and Pinterest report on Thursday.