Just Ad'ed July 27 - August 02

This week: Google updated Performance Max and introduced passkey authentication for its Ads API; Meta reported 28% revenue growth despite AI infrastructure costs eating into margins; Amazon crushed Q2 earnings with nearly $20 billion in ad revenue; Reddit delivered 61% revenue growth but spooked investors over AI search concerns; and OpenAI tested conversational ad formats that bypass traditional landing pages entirely.

GOOGLE FORCES PASSKEY AUTHENTICATION WHILE EXPANDING AI AD COPY

📈 WHAT HAPPENED?
Google made passkeys mandatory for all new Google Ads API authentication while simultaneously expanding its AI-generated ad description test to Shopping campaigns. The authentication change doesn't affect existing refresh tokens, but signals a major security shift for advertisers managing programmatic access.

🔍 SO WHAT?
If you’re building API integrations or onboarding agencies to your Google Ads setup, it’s time to audit your authentication workflows. Meanwhile, Google’s push into AI-generated Shopping descriptions marks an even deeper shift toward ad automation, meaning advertisers will have less direct control over how product catalogs appear to shoppers. Call it platform evolution or pixel politics: Google is firmly taking the wheel.

META'S AI INVESTMENTS OUTPACE REVENUE GROWTH DESPITE STRONG Q2

📈 WHAT HAPPENED?
Meta reported $60.4 billion in Q2 revenue (up 28% YoY) across its family of apps, but expenses grew even faster due to massive AI infrastructure investments, layoffs, and mounting legal costs. CFO Susan Li emphasized the growth, but investors zeroed in on the widening gap between revenue and spending.

🔍 SO WHAT?

Meta's betting billions that AI-powered targeting and creative will justify skyrocketing operational costs. For advertisers, the message is clear: automation is non-negotiable. To prove its AI investments yield actual ROI, Meta is aggressively pushing hands-off campaign structures and stripping back manual controls. It’s the classic walled-garden trade-off: less transparency, more black-box optimization, and a steep learning curve for performance marketers.

AMAZON HITS $19.8 BILLION IN Q2 AD REVENUE

📈 WHAT HAPPENED?
Amazon's advertising business reached $19.8 billion in Q2, up 26% year-over-year from $15.7 billion in Q2 2025. Despite being a massive number by any standard, the ad revenue barely registered in earnings discussions as investors focused on Amazon's broader business performance.

🔍 SO WHAT?
Amazon’s ad engine is already larger than most standalone ad platformset, and it's still growing at 26% annually. If you aren't leveraging Amazon DSP for off-platform reach or optimizing product detail pages for retail media, you're bleeding ad spend on less intentional channels. Bottom line: Amazon Ads isn't optional anymore. For e-commerce brands, it’s baseline infrastructure.

REDDIT'S 61% GROWTH GETS CRUSHED BY AI SEARCH FEARS

📈 WHAT HAPPENED?
Reddit delivered objectively stellar Q2 results with overall revenue up 61% YoY to $805 million and ad revenue up 64% to $762 million. Despite the performance, the stock cratered 13% in after-hours trading as Wall Street fixated on how AI search engines might disrupt Reddit's traffic and engagement.

🔍 SO WHAT?

Wall Street's reaction sends a clear signal: even strong business performance isn't enough if a platform's traffic is vulnerable to AI disruption. For advertisers, that could create short-term buying opportunities as Reddit ad inventory becomes more competitively priced. More importantly, it's a reminder that relying too heavily on search-dependent platforms is increasingly risky. Now is the time to diversify your single source of truth and build a more resilient media mix.

OPENAI TESTS AI AGENT ADS THAT SKIP YOUR WEBSITE

📈 WHAT HAPPENED?
OpenAI began testing a new ChatGPT ad format that starts a conversation with an AI business agent instead of sending users to a traditional landing page. The format represents a fundamental shift in how ads connect users to brands, prioritizing interaction over traffic.

🔍 SO WHAT?

The future of digital advertising may arrive sooner than expected. If ads begin connecting users directly to AI agents instead of sending them to your website, the traditional conversion funnel fundamentally changes. Success will depend on how well your product data, brand messaging, and customer experience perform inside conversational AI, not just on landing pages. This isn't solving yesterday's problems; it's preparing for the next evolution. Brands should start optimizing for intent gap scenarios where customers make decisions without ever visiting a website.

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