Meta and Google Search outperform ad forecasts

WARC Media’s latest Earnings Debrief shows a mixed picture across major digital advertising platforms in the first quarter of 2026, with Meta and Google Search outperforming forecasts, Amazon tracking expectations closely, and YouTube continuing to underperform relative to projections.

The analysis compares reported advertising revenues from major technology companies against WARC Media’s global ad spend forecast, which is built on a proprietary model drawing on more than two million data points.

The findings underline widening performance differences across platforms as automation, AI integration, and retail media continue to reshape digital advertising dynamics.

Meta and Google Search lead against forecasts

Meta recorded advertising revenue of $55.0bn versus a forecast of $54.1bn, outperforming expectations by 2.3 percentage points. WARC attributes the result to improved targeting, increased automation, and stronger monetisation of user engagement across its platforms.

Google Search also exceeded expectations, with ad growth coming in 5.4 percentage points above forecast. Alphabet reported total advertising revenue of $60.4bn, driven by continued strength in search activity and early signs of AI-supported product features contributing to user engagement.

James McDonald, Director of Data, Intelligence & Forecasting, WARC: "With this earnings cycle closely tracking our forecasts, WARC's outlook for the year remains broadly unchanged for the major online platforms. The next phase of growth is likely to favour those that can turn AI from a fashionable noun into a measurable commercial advantage. As ever in advertising, rhetoric is plentiful; revenue is indelible."
Meta performance driven by engagement gains

Meta’s results were supported by increased time spent on platforms, including a reported 10 percent rise in time spent on Reels content on Instagram. The company continues to emphasise automation and AI-driven ranking systems as key contributors to performance.

Susan Li, Chief Financial Officer, Meta: "Ranking improvements on Instagram drove a 10% lift in time spent with Reels in Q1."

The performance suggests Meta is strengthening its ability to convert engagement into advertising revenue, supported by improved monetisation across its apps.
Amazon steady as retail media expands

Amazon reported advertising services revenue of $17.2bn, broadly in line with expectations. The company continues to position its advertising business as a full-funnel offering, supported by first-party purchasing data and closed-loop measurement capabilities.

WARC notes that retail media continues to expand its share of global advertising investment, driven by stronger links between ad exposure and sales outcomes, as well as growing use of streaming and automation tools.

YouTube continues to miss forecasts

YouTube reported approximately $9.98bn in ad revenue, falling $72m short of WARC’s forecast. The shortfall highlights a persistent gap between audience engagement and monetisation performance, particularly in short-form video formats.

The results mark a second consecutive quarter of underperformance against expectations, despite continued growth in video consumption across the platform.

Display advertising reflects wider open web weakness

Google’s Display Network recorded a 3.9 percent decline, exceeding the forecasted drop of 2.3 percent. WARC describes the trend as consistent with broader challenges facing the open web, where display inventory continues to lose momentum.

The decline suggests ongoing pressure on traditional web-based advertising formats as investment shifts toward closed platforms with stronger data and automation capabilities.
Platforms diverge as AI reshapes ad ecosystem

Across the quarter, WARC concludes that platforms combining scale, first-party data, and automation continue to attract the strongest advertiser demand. Meta’s gains, Amazon’s steady expansion, and Google Search’s resilience contrast with weaker performance in display and video monetisation.

The findings indicate that while AI investment is influencing performance across the sector, its impact remains uneven depending on how effectively platforms translate engagement into revenue.

Follow Marketing Report on LinkedIn