Ad Tech Briefing: Q2’s Big Tech earnings, small-scale concessions, and frustrated dealmakers  

Shifting sands 

Last week saw Amazon and Meta issue their earnings for the period, with the social media giant breathing down the neck of market-leader Google, generating $61 billion in Q2 revenue (up 28% year-on-year), while the e-commerce giants saw a similar growth rate (26%) with ad revenues nearing $20 billion during the period.

For context, Google’s advertising growth rate (14.5%) trailed the above duo during the same period, but its overall ad revenue ($81.6 billion) underscores its place at the top. In normal times, such figures would wow the markets, but in an era of AI disruption, Wall Street investors judged the numbers harshly, predominantly due to the trio’s AI-related capital expenditures, a sign of the shifting dynamics between Madison Avenue and Wall Street. 

Transparency concessions

Further evidence of this point was on display when Digiday revealed how Google is making a (rare) concession to Madison Avenue’s calls for transparency amid its haste to interweave AI into every aspect of its operations, with a limited pilot feature for Performance Max, a.k.a. PMax,  campaigns that lets media buyers opt out of third-party search partners and the Google Display Network. The move is likely to have been in the asking for some time, after earlier high-profile studies demonstrated the brand safety liabilities involved in blindly trusting AI-powered platforms such as PMax. 

As a sidebar, Digiday also recently covered OpenAI’s continued efforts to build a $100 billion ad empire by the close of the decade by offering promotional credits — such as $50 or $100 matching incentives — to new advertisers. It’s a common tactic used by platforms like TikTok, Google, and Meta to encourage initial spending and habit formation.       

However, as sources noted, there is continued concern about proving ROAS with ChatGPT, with media buyers evidently concerned about measurement options, platform accessibility, and high minimum spend requirements, which are likely fueling eMarketer’s estimate that OpenAI will fall significantly short of its projected ad spend goal.  

PE looms over ad tech  

Doubtless, independent ad tech outfits seek to exploit such concerns, with a proxy of the success of such appeals on the horizon with the publicly-listed entities in this cohort subsequently due to issue their Q2 earnings: AppLovin, Criteo, Magnite and Taboola all on Aug. 5; PubMatic and The Trade Desk on Aug. 6; and Viant Technology on Aug. 10.   

Of course, the mixed fortunes of such players are well noted, with one discernible trend among this cohort being the recent spate of take-private deals over the last 12 months, with Criteo the latest subject of speculation. That came just weeks after the announcement of LiveRamp’s intended sale to Publicis Groupe. Meanwhile, Integral Ad Science’s sale to private equity firm Novacap, taking it off the public markets, was completed earlier this year.  

LiveRamp aside, a common theme connecting the above deals is PE’s willingness to see value where the public markets are skeptical, with sources telling Digiday that whispers of similar transactions in the space are currently doing the rounds – presently, evidence is too scant to publicly name names. 

Which way is the exit?
A recently published study from SI Global, which interrogated more than 80 PE firms and 266 portfolio companies, noted a marked shift in investment priorities. Investment in business services is entering a more mature phase rather than retreating. Per the report, AI is increasingly viewed as a value-creation opportunity rather than a disruption risk, provided management teams can demonstrate a credible strategy for embedding it into their commercial model.

However, a report by investment bank LUMA Partners, which surveilled market activity in the second quarter of this year, noted that, despite high-profile deals such as the above-listed transactions — not to mention strategic buys such as Comcast’s acquisition of Vibe.co for more than $1 billion — overall deal volume is down. 

Indeed, M&A activity declined modestly in Q2 2026 amid persistent geopolitical and macroeconomic uncertainty, but strategic buyers continued pursuing larger acquisitions to strengthen competitive positioning. LUMA notes that strategic dialogue has increased following recent deals and expects transaction activity to accelerate during the second half of 2026 as buyers pursue inorganic growth, particularly around AI capabilities and CTV. 

To this end, Zeta Global, itself a publicly listed entity, recently announced the closure of a $1 billion M&A credit facility, with the company’s CEO, David Steinberg, articulating the pace of his appetite for inorganic growth. 

“As Zeta Global continues to grow, so does our capacity to invest behind it. We’ve closed a new $1 billion credit facility, so that as opportunities for M&A come available we have the dry powder we need,” he wrote on his July 28 post. “We can buy back more shares faster, and have greater corporate liquidity … there’s a lot of opportunity ahead for Zeta, and this positions us to capitalize on it.”  

Numbers to know 

Findings from LUMA Partners’ Q2 report: 

• 16%: the amount ad tech total deal activity fell annually in Q2  
• 1%: the amount ad tech deal activity fell sequentially in Q2  

What we’ve covered 

How AI costs are quietly reshaping principal media deals

Holding companies are offering to absorb AI infrastructure expenses in exchange for clients committing a fixed share of their media spend to principal inventory

Google quietly gives ground on PMax controls

Google’s Performance Max product has frustrated and bemused media buyers since its launch four years ago. In recent weeks, however, the tech giant has chosen to yield a little ground to marketers and buyers asking for more control.

What we heard

“You can ‘rent’ an AppLovin ad account for 4% of spend.”

Vivek Girotra, vp of growth marketing at Times Internet, recalls a recent Telegram Messenger exchange, where someone asks for an account, and receives a reply, “I rent them for 4% of ad spend, if your product/campaign is eligible to run.” Someone else offers to buy one outright. “I don’t sell them.”

What we’re reading

WFA and X settle GARM case

Court proceedings that chased the term brand safety from public discourse has now been settled.

Big Tech’s free cash flow is turning negative – who’s next?

I/O Fund’s lead tech analyst, Beth Kindig, notes the consequences of Big Tech’s growing momentum in AI monetization, but capex continues to far outpace operating cash flow. 

Private Claude chats exposed in Google and Bing search results

The screwup shows how tricky it can be to stop web crawlers from making ostensibly private conversations with AI chatbots entirely too public.

Netflix’s first Chief Sustainability Officer departs after nearly six years
Netflix Chief Sustainability Officer Emma Stewart has announced she is leaving the streaming giant after nearly six years in the role to join climate storytelling organization Climate Spring — will she be replaced?