Google US digital ad revenues drop 5.3% in 2020

Digital advertising revenues at Google US are predicted to drop 5.3% to $39.6 billion by the end of the year, according to a forecast by eMarketer.

The drop also marks a decline in the group’s share of the US digital ad market to 29.4% from 31.6% in 2019.

Previously eMarketer estimated the group’s share would increase 12.9%.

It shows that the coronavirus crisis has had a serious effect on advertising budgets as advertisers across some categories such as travel cut their budgets.

“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,” said Nicole Perrin, principal analyst at Insider Intelligence. “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.”

However, Perrin added that Google’s ad revenues had been growing more slowly since 2016.

Rivals Facebook and Amazon are enjoying a boost in ad revenues by comparison.

Facebook’s net US digital ad revenues are estimated to grow 4.9^ to $31.4 billion with a market share increase to 23.4% (from 22.7%). This is largely driven by Instagram.

Amazon’s digital ad revenues will jump 23.5% to $12.7 billion and a market share of 9.5%.

Google net search ad revenues are to drop 7.5% in 2020 in the US.

“Search still accounts for the vast majority of Google’s net US ad revenues, so even though YouTube will continue to grow this year, it won’t be enough to fully counterbalance the more negative trends in search,” Perrin said.

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