WASHINGTON, June 22 — Google is expected to see its first decline in US ad revenues this year as the coronavirus pandemic hits travel advertising, a market tracker said today.
New research by eMarketer indicates Google will still be leading digital advertising but with a smaller share as the market evolves into a “triopoly” with Facebook and Amazon.
Google’s net US digital ad revenues will drop 5.3 per cent to US$39.58 billion (RM169 billion) to bring its market share down to 29.4 per cent, according to the eMarketer forecast which was sharply revised due to the pandemic.
Google’s decline is “primarily because of a sharp pullback in travel advertiser spending, which in the past has been heavily concentrated on Google’s search ad products,” said eMarketer analyst Nicole Perrin.
“Travel has been the hardest-hit industry during the pandemic, with the most extreme spending declines of any industry. E-commerce-related ad spending has also been dampened to some extent: Amazon reportedly pulled its ads from Google search earlier this year as it struggled to meet customer demand for its e-commerce services.”
A big part of the decline will come from “search advertising,” or paid messages deployed by Google when a user enters a search query.
Search ad revenue, in which travel is a major component, is expected to drop by 7.2 per cent in the US, eMarketer said.
Facebook is expected to see growth in its US ad revenues of nearly five per cent to US$31.43 billion, driven by Instagram, according to the report. That would give Mark Zuckerberg’s firm a 23.4 per cent market share.
Amazon, meanwhile, is extending its strong growth in online advertising with an expected 23.5 per cent rise to US$12.75 billion, putting its market share at 9.5 per cent, eMarketer said.
Until recently, analysts had described the digital ad market as a duopoly dominated by Google and Facebook, but Amazon has been rising quickly.
Google has been growing at a slower rate than the overall digital ad market since 2016, “so this year will continue a trend of Google losing digital ad market share in the US,” Perrin said. — AFP
