Google’s US ad revenue to take a hit due to pandemic

Platform Industry: Google search engine

Google’s US advertising revenue will drop 5.3% as brands pare spending during the coronavirus pandemic, according to an eMarketer report on Monday, the first decline since 2008 when the research firm began estimating the Alphabet Inc unit’s ad revenues.

KEY POINTS:

  • US advertising revenue at Google will drop some 5.3% according to a new report from eMarketer
  • This would be the first decline experienced with 2008
  • The key factor in the decline seems to be the COVID-19 pandemic and the resulting drop in travel-based advertising
  • Facebook’s revenue is expected to increase by slow to about 5%

The decline for the world’s largest digital advertising company is primarily due to its heavy reliance on travel companies that advertise in Google searches, which has been the hardest-hit industry during the pandemic, eMarketer said.

The forecast shows how the health crisis has hurt even the largest advertising platforms, as ad spending typically follows economic conditions and demand from consumers.

Google had been expected to grow its US advertising revenue by almost 13%, according to eMarketer’s first-quarter forecast which did not account for the pandemic.

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Meanwhile, Facebook, which is the second-largest digital advertising company, is expected to increase its US advertising revenue by nearly 5% this year. This is far less than the 26% growth in 2019, the research firm said.

Via our content partners at Reuters. Reporting by Sheila Dang. Editing by Richard Chang.

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