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