Meta's advertising revenue, historically robust due to user data and precision targeting, faces a significant threat from proposed US tariffs on Chinese goods. Analysts predict a potential loss of up to $7 billion in ad revenue, largely due to the reduced spending by Chinese e-commerce firms like Temu and Shein, which have previously been valuable advertisers on Meta's platforms. These companies accounted for about 11% of Meta's total ad revenue and nearly 25% of its recent growth, highlighting a reliance that could expose Meta to vulnerabilities in response to impending trade policies.
For Meta, the timing couldn't be worse. The company has leaned hard into Chinese ad spend as a revenue driver post-2022, at a time when regulatory scrutiny in its home markets was growing and TikTok was stealing mindshare among younger users.
According to MoffettNathanson, Chinese advertisers contributed around 11% of Meta's total ad revenue last year and accounted for nearly 25% of its growth over the past two years.
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