Martin Sorrell, an influential figure in the advertising industry, is confident that Meta will have an impressive comeback in 2021, and he is optimistic about the future of U.S based technology companies, even with the difficult situation in 2022.
In the last 12 months, U.S technology businesses have laid off more than 60,000 staff due to an economic slowdown, increased interest rates brought on by inflation, and the intense rivalry between the leading tech companies, which has caused their profit margins to diminish and their stocks to decline.
In November, Meta, the parent company of Facebook, declared that they would do away with 13% of their personnel, which works out to more than 11,000 people.
They also presented a dismal outlook for the fourth quarter, causing their market capitalisation to reduce by almost one-fourth, and their stock price to drop to its lowest rate since 2016.
A considerable decrease in digital advertisement expenditure and rivalry from new competitors such as TikTok, combined with troubles related to modifications to Apple’s iOS concerning privacy, have been obstructing the social media corporation’s progress during the past 12 months.
The business has also suffered a major setback from its enormous investment in creating its augmented reality universe known as the metaverse — an approach that has caused disagreement among analysts and investors.
Sorrell, executive chairman of U.K. advertising agency S4 Capital, expects Meta to address most of its business challenges in 2023, while benefiting from China’s reopening.
“I think you’ll see Meta come back extremely strongly this year, on the back of reels and business messenger, to deal with the competition from TikTok and other short form video competitors,” says Sorrell
“Google had a solid year last year, and I think they’ll have a strong year this year. Amazon increased its advertising revenues from $31bn to $41bn, and I think [it] will hit $100bn in time, despite what you’re seeing in terms of jobs and hiring,” he said.
He also predicted that the reactivation of the Chinese market would be immensely beneficial for large tech companies, observing that Chinese businesses that spread their operations to other countries have typically been a major source of income for the likes of Meta, Amazon and Google’s parent company Alphabet.
After departing from WPP in 2018, Sorrell created S4, which is engaged in both the digital advertising and digital transformation fields.
On Wednesday, S4 validated its yearly guidance, and Sorrell stated that his customers’ ad spending priorities in the year 2023 would be to emphasize on the increase of activation and performance, as well as cutting down the cost of digital transformation.
