eMarketer Predicts Unprecedented Google Revenue Decline
For the first time in years, eMarketer expects Google’s net US digital ad revenues to decline in 2020 due to the ongoing COVID-19 pandemic. Facebook and Amazon’s revenues are expected to grow, but more slowly than predicted at the beginning of the year. The three platforms’ combined revenues will increase by less than $2 billion, a major reversal for the digital advertising sector. Here’s what eMarketer had to say:
Google’s US ad revenues will drop roughly 5.3 per cent to just under $39.6 billion. Its share of the digital advertising market will also decrease, from 31.6 per cent to 29.4 per cent. At the beginning of the year, eMarketer predicted 12.9 per cent growth for Google’s ad business.
“Google has been growing its net US ad revenues at a slower rate than the overall digital ad market since 2016,” said eMarketer principal analyst Nicole Perrin, “so this year will continue a trend of Google losing ad market share in the US.”
Facebook’s ad revenues are expected to grow from $29.95 billion in 2019 to $31.43 billion in 2020, up 4.9 per cent. Its share of the market will increase, from 22.7 per cent last year to 23.4 per cent. It is unclear whether eMarketer considered the recent Facebook advertising boycott.
Amazon will see the biggest percentage increase in revenues in 2020. It is expected to bring in $12.75 billion, up 23.5 per cent year-over-year. Its market share will also increase by almost two per cent to 9.5 per cent.
“Google’s net US ad revenues will decline this year primarily because of a sharp pullback in travel advertiser spending which in the past has been heavily concentrated on Google’s search ad products,” Perrin said in summary. “Travel has been the hardest-hit industry during the pandemic, with the most extreme spending declines of any industry. Ecommerce-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 ecommerce services.”
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