Even Google and Facebook May Be Facing an Ad Slump


That’s not to say that the two companies aren’t heading into a rough patch. In an investor note last month, John Blackledge, an analyst for the investment firm Cowen, trimmed his 2020 revenue forecast for Google and Facebook by nearly 20 percent. He now predicts a decline in annual revenue for both.

The prices of Facebook ads have declined 35- to 50 percent on average in recent weeks, said Alex Palmer, an analyst for Gupta Media, a digital marketing agency. Last month, Facebook warned that it was already seeing signs of an early pullback.

“Our business is being adversely affected like so many others,” Alex Schultz and Jay Parikh, two Facebook vice presidents, wrote in a company blog post in March. “We’ve seen a weakening in our ads business in countries taking aggressive actions to reduce the spread of Covid-19.”

Mark Mahaney, an analyst with RBC Capital Markets, ran 50 Google searches last month and found no paid ads for travel and restaurants. “We can’t recall ever NOT seeing a ‘Paid Ad’ under the search term ‘Las Vegas Hotels’,” he wrote. “This is indicative of the broader trends across online advertising.”

Average daily spending on digital ads slumped more than 20 percent in the latter half of March for sports and entertainment businesses, according to the advertising analytics platform Pathmatics. Cirque du Soleil, for example, went from sometimes spending more than $140,000 a day on digital ads in late February, to spending less than $40,000 a day in late March, to nothing in early April.

Travel companies like Korean Air and Norwegian Cruise Line dropped their digital ad spending to near zero in mid-March, according to Pathmatics. Home-rental company Airbnb suspended all marketing, cutting back from a projected $800 million this year.

Advertisers that are still spending are tiptoeing around coronavirus news. Stories or posts about death, illness and economic turmoil are not exactly advertiser-friendly, and many mainstream marketers are avoiding any pandemic-related content.



Source link