Meta’s ad surge outpaces Google search as AI reshapes ad markets

Meta’s ad revenue grew 26% to $63.1 billion in the third quarter, while Google’s search division rose 12% to $63.4 billion, widening the growth gap to its widest since 2021, CNBC reported.

How is AI boosting Meta’s advertising results?

AI tools are giving brands finer targeting on Facebook and Instagram, and Meta says the impact is measurable. CNBC noted that Meta CFO Susan Li said advertisers using the AI‑driven assistant “drove almost 5% more conversions” and “increased their advertising investment by 9% compared with similar non‑adopters.” The company cited a case where syrup producer Simply Organic Maple saw a 57% lift in purchases and a 36% drop in cost per purchase after using the tool, and almost 10 million advertisers employed at least one AI feature in the quarter.

Why is Google’s search revenue lagging behind?

Search is feeling pressure from conversational chatbots that bypass traditional blue‑link results. CNBC quoted analyst Nate Elliott of Emarketer, who warned that tools like ChatGPT, Anthropic’s Claude and Meta’s Muse could change search habits for the first time in a generation, a shift that could be “catastrophic for Google’s ad business.” Although Google recorded a record‑high number of search queries, revenue growth slowed, and the company added $11 billion from YouTube to its third‑quarter totals.

What are the broader AI investment plans for both firms?

Both firms are pouring money into AI infrastructure despite recent cash‑flow pressures. CNBC reported that Google projects up to $205 billion in capital expenditures this year, while Meta expects to spend up to $145 billion. Google is also deploying its Gemini models across its ads stack, and Meta continues to build AI‑powered subscription services to diversify beyond its near‑100% ad‑derived revenue base.