Google

Google’s Reliance On Travel Ads Dents US Ad Revenue

Google‘s U.S. ad revenue is about to take a fall due to the decline in spending from many companies tightening their belts during the pandemic, Reuters reports.

An eMarketer report on Monday (June 22) shows a drop of 5.3 percent, the search engine giant’s first negative return since the company began logging them in 2008. Google had previously expected to grow its advertising by 13 percent, according to a first-quarter forecast. But then came the pandemic.

The forecast shows how an economic downturn can have effects on even the largest spenders in any space. Ad spending typically goes in connection with spending and demand from customers.

Facebook is expected to grow its advertising revenue this year, but only by 5 percent instead of the anticipated 26 percent, Reuters reported.

Pinterest, the online image-board, has reported a rise in advertisers asking for payment deferments, unable to meet their deadlines due to pandemic-related cash drains.

The company has been in a bind due to the balance between needing to retain loyal advertisers while also still turning a profit itself. As of June 9, the company had not yet granted the deferments, but had instead been working out some compromise.

The decline is largely because of the shortcomings of travel companies, which have seen free-falling downward trends in revenue as the coronavirus pandemic rendered most of the industry irrelevant for the past few months. The industry was one of the hardest hit by the pandemic because of the perils of traveling and possibly spreading the virus in enclosed spaces or by going long distances.

One solution batted around by experts has been a potential incentive for Americans to travel, which proponents say could help boost hotel and restaurant owners hurting because of the lost revenue. However, numerous details about the idea, including income limits and how a vacation is defined, still remain to be solved.

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