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Google and Meta are Profiting from Temu’s U.S. Expansion

Google and Meta are Profiting from Temu's U.S. Expansion

A huge online store Temu is at the top of Meta’s list of ads because it made the most money on the site in 2023.

The Wall Street Journal spoke to people who knew about the situation and said that Temu’s parent business, PDD Holdings, spent almost $2 billion on ads at Meta last year. In the same way that Temu spent money to make money, it was one of Google’s top five marketers last year.

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A company spokesperson said that Temu denied paying $2 billion for ads on Meta’s sites, but the Chinese online store wouldn’t say how much it spent.

The Little-Known Online Store

Temu, founded by PDD Holdings in 2022, has quickly gained popularity in e-commerce, where Shein and other Chinese companies are already powerful. The things that Temu sells are very different. It sells apparel, health and beauty products, home and food appliances, toys, games, and pet supplies.

Temu’s high ad spending astonished Meta and Google’s executives, two of the largest brands in digital advertising. They told the Journal they were surprised.

Companies with ties to China may be trying to reach U.S. customers by spending a lot of money quickly.

But Temu did something different: they showed up at the Super Bowl, the most famous ad spot in the U.S. The 30-second retail ad appeared four times during this year’s game, which over 123 million people watched. Putting ads on America’s biggest game night is not cheap. A 30-second ad block costs about $7 million, according to Ad Age.


How are Google and Meta profiting from Temu?

Advertising: Temu likely relies heavily on advertising to reach new customers in the U.S. Google and Meta are two of the largest advertising platforms in the world, so the company is likely spending money on ads on these platforms.

App Store revenue:
 If Temu has a mobile app, Google and Meta (which owns the Facebook App Store) take a cut of all in-app purchases and subscriptions.

About Davie Bancroft

Davie Bancroft is an accomplished author with a strong focus on investment and the tech business landscape. With extensive knowledge and experience in these fields, he provides valuable insights into emerging trends and opportunities. Davie's writings explore the intersection of technology and finance, offering practical advice for investors and entrepreneurs. His expertise and analytical approach make him a trusted resource for those seeking to navigate the dynamic world of investments and tech startups.