Tech's other supply chain problem

[View in browser]( [Bloomberg]( Hi, it’s Mark. Tech earnings season is a reminder that online ads are big business—and could be impacted by omnipresent supply-chain problems. But first... Today’s top tech news: - VC firm Sequoia is [overhauling](its business model - Microsoft’s cloud business [is booming]( - Robinhood’s revenue from [crypto trading]( fell 78% in the latest quarter Bottlenecks for the holidays Snap Inc. calls itself a [camera company](. Facebook Inc. wants to be a [metaverse company](. Google's Alphabet Inc., maker of self-driving cars and drones, would like you to buy its new Pixel smartphone. But earnings season reminds us that these companies are chiefly in the business of selling online ads. That business, while still [on the rise](, is suffering a serious headache. Supply-chain chaos and a global chip shortage has paralyzed companies selling gadgets, consumer goods and [cars](—industries that spend a ton on marketing—right ahead of the holidays. "This is a monster issue," said Bryan Wiener, an ads veteran and chief executive officer of analytics firm Profitero. His firm crunched numbers on more than 600 websites in October and found unusually high out-of-stock figures—with some categories, like electronics (34% of products) and grocery (33%), in particularly low supply. Companies without stuff to sell aren't usually inclined to run ads for that stuff. Snap Inc. [warned investors]( about supply issues last week, giving a disappointing sales forecast for the current quarter in anticipation of a marketing drawback. Facebook Chief Operating Officer Sheryl Sandberg said on an [earnings call]( that advertisers from "every region and across a range of verticals" were affected. Even Google, whose size usually insulates it from economic whims, admitted that it saw a slowdown in ads for cars. If those issues persist, it could mean a muted holiday quarter for some of the world’s largest tech companies, which were partly responsible for driving the stock market during the pandemic. The extent of the impact is murky. Most marketers like to plan their budgets months in advance. Now, with components and shipping times in flux, they're forced to shoot from the hip—running ads on Google or Instagram or Amazon.com or not at all, depending on what's in stock or what will be eventually. "The game is a lot more like shifting cards around," explained Jamie Schwab, head of e-commerce, sales and marketing for Dole Packaged Foods. John Donahue, who runs media consultancy WLxJS, recently spoke to a carmaker forced to stop buying search ads with its brand name—square one of digital marketing—because of supply shortages. "Everyone is going to feel it," Donahue said. "Money is moving." Whether it's moving away from digital platforms, or how much is moving, is less clear. Twitter Inc., which relies more on branding promotions than buy-this-thing ads, [shrugged off]( supply chain issues on its earnings call. Unilever Plc, a mega-advertiser, said its "on-shelf" rate for consumer products was at 96%. And executives at Publicis Groupe SA, the ad agency giant, told investors it was "too early to say" if supply issues would throttle holiday spending. Meanwhile, Facebook and Google booked a collective $81 billion in ad revenue during the third quarter, and neither company cautioned about any massive drop-offs coming for the next. Even as these Silicon Valley types try to move beyond ads, it remains a lucrative business. Profitero's Wiener sees the supply issues scrambling marketing well into 2022, but he doesn't see it dramatically curtailing big company revenues, particularly as Google, Facebook and all the rest edge increasingly into e-commerce. That field, Wiener said, "is growing so dramatically." Ads or no, people are still spending a lot of money online. —[Mark Bergen](mailto:mbergen10@bloomberg.net)   If you read one thing Twitter says it’s been relatively unscathed by Apple’s new limits on [consumer data collection](. Here’s what you need to know Facebook is facing a public relations crisis, but 80% of analysts still [recommend buying the stock](. Fashion site Rent the Runway has a market value [of $1.3 billion]( after an initial public offering. Shares of the special purpose acquisition company linked to [Donald Trump’s new]( social media platform tumbled this week. Reid Hoffman said Mark Zuckerberg [contacted him]( after he criticized Facebook in a TV interview. Follow Us More from Bloomberg Dig gadgets or video games? [Sign up for Power On]( to get Apple scoops, consumer tech news and more in your inbox on Sundays. [Sign up for Game On]( to go deep inside the video game business, delivered on Fridays. Why not try both?  Like Fully Charged? | [Get unlimited access to Bloomberg.com](, where you'll find trusted, data-based journalism in 120 countries around the world and expert analysis from exclusive daily newsletters. You received this message because you are subscribed to Bloomberg's Fully Charged newsletter. If a friend forwarded you this message, [sign up here]( to get it in your inbox. [Unsubscribe]( [Bloomberg.com]( [Contact Us]( Bloomberg L.P. 731 Lexington Avenue, New York, NY 10022 [Ads Powered By Liveintent]( [Ad Choices](