Adobe, a leading digital software company, reported a significant decline in digital ad revenue in the third quarter. The company’s digital ad revenue was down 19.2% from the previous quarter and 19.7% year over year, totaling $67 million. This decline brings Adobe’s total ad revenue for the year to $234 million, down 12.3%.
However, Adobe’s Customer Experience Cloud saw improved earnings, which helped offset the losses in digital advertising. Customer Experience Cloud revenue reached $1.2 billion this quarter, roughly flat compared to the second quarter but up $100 million compared to the same period last year. In total, Customer Experience Cloud revenue for the year is $3.62 billion, outperforming the previous year $350 million.
This decline in digital ad revenue serves as a reminder that businesses are shifting their focus to areas of digital marketing where they have more direct control, such as customer experience. Retail media networks, known for their ability to deliver targeted advertising, are likely to continue receiving more ad spend than general outlets.
Adobe’s President of Digital Experience Business, Anil Chakravarthy, noted that despite increased scrutiny of enterprise IT spend, customers are prioritizing investments in customer experience management (CXM) solutions. As customers increasingly seek omnichannel personalization and engagement, Adobe’s Journey Optimizer book of business has more than doubled year over year.
Despite the decline in digital ad revenue, Adobe’s overall third-quarter results exceeded Wall Street estimates. The company reported adjusted earnings of $4.09 per share, surpassing estimates of $3.98. Additionally, Adobe reported record revenue of $4.89 billion, exceeding expectations of $4.87 billion.
Overall, the decline in digital ad revenue highlights the importance of customer experience in digital marketing strategies. As businesses prioritize CXM solutions and invest in omnichannel personalization, companies like Adobe are seeing growth in their Customer Experience Cloud revenue.
– Adobe’s third-quarter digital ad revenue drops 19.2% QoQ and YoY: https://martechtoday.com/adobes-third-quarter-digital-ad-revenue-drops-19-2-qoq-and-yoy-288456