The impacts generated by the current Covid-19 pandemic have, over the days, increasingly facets. In the current scenario, several companies are suffering from the economic and social consequences generated by the disease. Facebook and Google, for example, are estimated to lose more than $ 44 billion in advertising.
The focus of people and governments is on controlling the pandemic. Thus, it makes sense for some companies to face declining profits and even stay in the red for a while, especially with the population remaining in isolation at home.
Ads that until a few weeks ago were pleasing now are no longer coherent, and several brands are beginning to think about other ways to communicate with the public. Ford, for example, inserted phrases in its commercials like “We are with you – now and in the best days to come”.
Estimates for Google and Facebook
Companies that sell ad space on their websites, like Google and Facebook, are suffering. An analysis team from investment bank Cowen Inc. analyzed the current situation of these companies and, according to the estimate, the two companies together are expected to lose US $ 44 billion invested in advertising this year alone.
Google’s total net revenue is expected to reach $ 127.5 billion, down $ 28.6 billion (18%) compared to the last forecast made by Cowen Inc. Facebook, in turn, should have advertising revenue of $ 67.8 billion this year – $ 15.7 billion less than the previous estimate.
The team said that despite the loss, both will remain highly profitable. Considering the total volume of messages, for example, the use of Facebook increased by 50% in the last month in countries most affected by the virus.
In 2021, the advertising business is expected to improve. Facebook, according to experts, should recover already next year, with an expected growth of 23%, resulting in US $ 83 billion in net revenue.