Coronavirus Outbreak Brings Advertisement Sector to a Stop Point

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The new type of coronavirus epidemic, which negatively affects all areas of life, also causes great negativities in the advertising industry. There is a big drop in the number of advertisers to giant companies like Facebook and Google

With the development of technology and the increase in consumption, there is an incredible increase in the advertising sector. So much so that Google and Facebook have managed to triple the number of advertising businesses in the past 5 years. The coronavirus epidemic started to have a reverse effect on the revenues of the companies and the sector in these days when the advertising industry was experiencing its golden age.

All of the travel and entertainment ads we once encountered disappeared from Google searches due to the epidemic. On the Facebook front, the situation is no different, and the company’s advertising prices have dropped to a record level. Wall Street analysts predict that both companies will see a drop in annual revenue for the first time in their history.

Giant companies are rather pessimistic in their revenue estimates:
This decline in the sector is compared to the type of decline traditional media experienced before. The situation seems pretty bad for Facebook and Google, while the rest of the digital advertising industry is much worse. At this point, EMarketer Chief Analyst Nicole Perrin says that Google and Facebook will be the number one choice when people still spend, and companies will probably be stronger after all this is over.

On the other hand, the situation does not seem heartwarming for many other giant names in the sector. Estimating that their income will increase between 5% and 11% in the first quarter in a report published recently, Twitter withdrew this forecast in the next report and announced that the income will decrease slightly. Similarly, Pinterest pulled back its 30% annual revenue growth forecast and said it started seeing a sharp drop in mid-March.

Facebook advertising prices have fallen by 35% in recent weeks:
Alex Palmer, an analyst at digital marketing agency Gupta Media, said that the prices of Facebook ads have dropped on average 35% in recent weeks. Facebook Deputies Alex Schultz and Jay Parikh also said in a company blog that was published last month that their business was negatively affected, and that the decline was higher in countries that took aggressive measures to prevent the spread of COVID-19.

Mark Mahaney, an analyst at RBC Capital Markets, stated that he ran 50 Google searches last month and found no paid advertising for travel and restaurants. In his report, Mahaney also shared that it is quite surprising that there are no paid advertisements under the search for ‘Las Vegas Hotels’.

Travel companies have reduced their advertising expenses to zero:
According to Pathmatics, travel companies such as Korean Air and the Norwegian Cruise Line reduced advertising spending to zero by mid-March. The home rental platform Airbnb has suspended all its marketing activities and predicts a huge drop in its revenue this year. He points to coronavirus news for a few advertisers who are still spending.

Bleak weather on the advertising industry is expected to continue in the coming days. It is a matter of curiosity how the companies will survive this process and what kind of moves they will make after the epidemic. We will only be able to get answers to these questions in the coming days.

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