The digital advertising market is showing signs of recovery, emerging from the challenging period of 2022 often referred to as the ‘dark days’.

After enduring a harsh 2022 marked by restrained spending due to inflation, followed by a tumultuous 2023 characterized by layoffs and cost reductions, leading digital advertising firms are now witnessing robust growth once again.

Meta, Snap, and Google all unveiled their first-quarter results this week, surpassing analysts’ expectations with revenue growth rates unseen in at least two years. Their financial successes were primarily fueled by improvements in their advertising sectors.

These companies entered earnings season with a favorable backdrop as their numbers could be compared to historically weak periods. However, investors and analysts remained cautious due to political and economic uncertainties globally, as well as ongoing challenges posed by high consumer prices.

Meta, the first among them to report results, allayed some concerns by revealing a 27% surge in first-quarter revenue to $36.5 billion. This marked Meta’s strongest expansion since 2021.

Analysts at Bernstein noted Meta’s resilience in navigating its “dark days” two years ago, attributed to a mix of macroeconomic hurdles and Apple’s iOS privacy change, which hindered ad targeting for social media companies. Despite losing significant value in 2022 and undergoing substantial layoffs, Meta rebounded by revamping its ad system with substantial investments in artificial intelligence, leading to a nearly tripled stock value in 2023.

Although Meta‘s first-quarter results exceeded estimates, the stock plummeted following CEO Mark Zuckerberg’s emphasis on the company’s diversified spending, notably in the metaverse, during the earnings call.

Alphabet followed suit, reporting a 13% increase in ad revenue for the first quarter to $61.66 billion, with YouTube ad revenue soaring 21% to $8.09 billion. Alphabet’s overall growth of 15% marked a rate last seen in 2022, prompting a 10% surge in the stock price, the sharpest rally since 2015.

Snap’s shares skyrocketed by 28% after reporting a 21% revenue increase to $1.19 billion, its strongest growth in two years. Snap attributed its success to accelerating demand for its ad platform and a more favorable operating environment.

Investors eagerly await reports from Pinterest and Amazon next week, eager for further insights into the state of the digital advertising market.