CORONAVIRUS OUTBREAK BROUGHT ADVERTISING INDUSTRY TO A STANDSTILL
The new type of Coronavirus outbreak, which affects every area of life in a negative way, is also causing great negative effects in the advertising industry.
A big drop in the number of advertisers to giant companies such as Facebook and Google is being observed.
With the development of technology and increasing consumption, the advertising sector is experiencing an incredible increase. So much so that Google and Facebook have managed to increase the number of advertising businesses up to 3 times in the last 5 years. The coronavirus epidemic began to have a reverse effect on the revenues of companies and the industry in these days when the advertising industry was experiencing a golden age.
All of the travel and entertainment ads we once frequently encountered have disappeared from Google searches because of the epidemic. The situation is no different on the Facebook front, too, and the company's advertising prices have fallen to a record low. On the issue, Wall Street analysts predict that both companies will see a decline in annual revenues for the first time in their history.
Giant companies pretty pessimistic on revenue forecasts:
The decline in the sector is likened to the kind of decline that traditional media has experienced before. While the situation for Facebook and Google looks pretty bad, the rest of the digital advertising industry is in much worse shape. At this point, EMarketer Chief Analyst Nicole Perrin says Google and Facebook will be the number one choice in the days when people are still spending, and companies will probably be in the stronger position once all this is over.
On the other hand, for many other giant names in the industry, the situation does not seem to be heartwarming. Twitter, which predicted in a recent report that its revenues would increase by 5% to 11% in the first quarter, retracted that forecast in a later report and announced that revenue would fall somewhat. Similarly, Pinterest also scaled back its forecast for annual revenue growth of 30% and said it was starting to see a sharp decline in mid-March.
Facebook ad prices have fallen 35% in recent weeks:
Alex Palmer, an analyst who works at digital marketing agency Gupta media, explained that prices for Facebook ads have fallen by an average of 35% in recent weeks. Facebook Vice Presidents Alex Schultz and Jay Parikh had also said in a company blog published last month that their business had been adversely affected, with this decline higher in countries that have taken aggressive measures to prevent the spread of COVID-19.
Analyst Mark Mahaney, who works at RBC Capital Markets, said he had conducted 50 Google searches last month, finding no paid ads for travel and restaurants. Mahaney also shared that it was quite surprising that there were no paid ads under the search for 'Las Vegas hotels' in his published report.
Travel companies cut ad spending to zero:
Travel companies such as Korean Air and Norwegian Cruise Line cut their advertising spending to zero in mid-March, according to Pathmatics. Airbnb, the home rental platform, has suspended all marketing activities and is predicting a big drop in its revenues this year. A few advertisers who are still spending pay attention to coronavirus news.
The gloomy weather over the advertising sector is also expected to continue in the coming days. How the companies will survive this process and what kind of moves they will make after the outbreak is a question of curiosity. We will only get the answers to these questions in the coming days.