Ad Tech Splits in Two: AppLovin Soars, Open Web Players Slide

What happened in Q3

Third-quarter results from six publicly traded ad tech companies show an industry moving in two directions. According to Digiday's roundup, AppLovin and Unity grew strongly, while Criteo, Taboola and Teads reported falling revenue.

AppLovin's revenue rose 55% to $2.19 billion, with net income up 72% to $1.44 billion. It guided Q4 revenue to $2.365-$2.395 billion. The company also noted that its Q3 revenue was larger than the other five companies combined, at roughly $1.94 billion.

Unity grew 32% to $622 million. Its Grow Solutions division, which houses the media business, climbed 44%, and its Vector ad platform grew 126% year over year. Unity also posted its first profitable quarter since its IPO. Magnite grew 14% to $204.2 million.

On the other side, Criteo's revenue fell 11% to $416 million, Taboola's fell 6.9% to $462.3 million, and Teads dropped 26% to $235.1 million.

Growth is not the same as profit

The revenue trend did not always match the profit trend. Taboola's revenue fell, yet its gross profit rose 9.6% to $152.3 million. That suggests it is getting more from each impression even as volume declines.

Criteo went the other way. Its contribution ex-TAC fell 17%, gross margin slipped from 55% to 50%, and net income dropped 85% to $6 million. Its retail media revenue fell 23%, partly because two unnamed clients cut spend by about $20 million.

Teads had the worst quarter. Gross profit after TAC fell 28% to $93.5 million, it did not reinstate financial guidance, and its net loss was $325.5 million against $19.7 million a year earlier. Executives blamed continued weakness in open internet advertising.

CTV helps, but size matters

Connected TV was a bright spot. Magnite's CTV contribution ex-TAC rose 39% to $105.4 million, now about 53% of its total, up from 45% a year ago. Its display and other video business grew just 5%.

Teads tells a different story. Its CTV revenue grew 37% and the company has booked nearly $100 million year to date, but CTV was only 12% of quarterly revenue. A fast-growing channel cannot offset a collapsing core business if it is still small.

Why this matters for marketers

The pattern points to a shift of advertising money toward app-based environments, both mobile and CTV, and away from the open web. That fits what many publishers already feel: less ad demand, lower impression volumes and more pressure on traffic-dependent models.

For advertisers, this changes where your reach comes from. Cost and performance on open-web native, retargeting and display could look quite different from a year ago. Platforms with scale in apps and CTV may also gain pricing power as budgets concentrate there.

The source does not say why open web is weakening, so I would not blame any single cause. Still, the direction of travel is clear.

Practical actions

• Audit your channel mix. Check how much of your spend and revenue depends on open-web display, native or retargeting. If it is a large share, test alternatives now, before costs or performance shift.
• Test CTV in small, measurable steps. It is growing, but treat it as an experiment with clear goals rather than a default replacement.
• Measure incrementality. If a vendor's revenue is shrinking, ask what is actually driving your results. Holdout tests tell you more than platform dashboards.
• Question retail media spend. Criteo's decline shows even established offerings are volatile. Review contracts, reporting and what the spend delivers.
• Reduce dependence on paid reach. Build email, owned content and search visibility so a shift in ad markets does not cut your traffic overnight.
• Watch next week's filings. Zeta Global, The Trade Desk, PubMatic and Liftoff Mobile are due to report and will show whether this split holds.

The bottom line

Ad tech is no longer one market moving together. Scale, app and CTV exposure, and profitability discipline now separate winners from the rest. Marketers should plan budgets with that divide in mind, not assume the open web will behave as it did two years ago.