Meta and Google are diverging in their use of AI for advertising, with Meta leveraging AI to boost ad efficiency and revenue while Google faces potential cannibalization of traditional search ads by AI chatbots.

Meta’s ad revenue for the quarter rose 26% year over year to $63.1 billion, driven by AI-powered ad placement and efficiency, with around 10 million advertisers using its AI tools and advertisers seeing roughly 5% more conversions and 9% higher ad spend.

Google is navigating a landscape where AI-generated answers shift user behavior, potentially reducing click-based opportunities despite Google's $63.4 billion in revenue.

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Andromeda filters millions of ads to about a thousand candidates, making creative diversity crucial as similar ads are filtered out, pushing brands toward varied concepts and creator-sourced content.

Source: CNBC via article.

Andromeda scores every eligible ad, uses index matching to enforce targeting rules, and applies a relevance model that draws on engagement history, cohort data, and semantic features from large language models to route ads to specialized sub-models based on user interests.

Experts note the system emphasizes matching ads to individual user histories and behaviors over broad audience targeting, raising questions about advertiser control over which ads are tested or win in auctions.

Advertising is becoming a blend of performance and trust, with infrastructure and the ability to show solid AI-driven ROI determining where marketers allocate budgets.

Amazon’s advertising revenue grew 11% to $19.64 billion, with cost discipline evident as sales and marketing expenses declined, and Prime Day timing influencing ad growth.

Investors reacted with weak confidence and a shrinking valuation for Google, reflecting concerns about slower growth and changing user behavior.