Google takes initial hit from scaling back of travel search ads

Google takes initial hit from scaling back of travel search ads
Photo Credit: NiP Photography/Shutterstock

Google experienced a “significant downturn in ad revenues” during March as the coronavirus pandemic started hitting the marketing budgets of brands across multiple sectors.

The search giant’s parent Alphabet recorded its first-quarter results of 2020 with a revenue increase of 13% year-over-year to $41.2 billion.

Ad sales in Google alone accounted for $33.8 billion in Q1, with YouTube’s share growing 33.5% year over year, the company says.

CEO Sundar Pichai acknowledges some of its large customers are clearly putting marketing budgets on hold.

“There are large sectors of the economy which are affected -- things like travel,” he says.

Generally, search behavior has been impacted by a shift away from commercial areas such as travel and consumer products to coronavirus-related terms, CFO Ruth Parat explains.

The wider impact of travel’s massive reigning in of marketing spending from March onward will no doubt be felt more acutely in Google’s second-quarter performance.

Expedia Group chairman Barry Diller said earlier this month that it would most likely spend just a fifth of its annual advertising budget during 2020.

Booking Holdings has yet to make such forecasts but it is extremely unlikely to spend $4.97 billion this year -- the vast majority of which goes to Google.

The two companies splashed out a combined $11 billion on digital marketing during 2019.

Source: PhocusWire


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