Analyst Lowers Search Travel Ad Outlook, Google's Earnings Too

by Joe Mandese @mp_joemandese, March 5, 2020

Even as Madison Avenue's major ad forecasters begin reassessing their outlooks to factor the impact the Coronavirus outbreak is having on the media marketplace, a major Wall Street securities firm this morning is lowering the outlook for travel ad spending, which at $20 billion currently is the sixth-largest online ad category.

"Travel is also the most search-heavy ad vertical at approximately 54% of total digital ads spent on search vs. 42% for all industries combined," Needham analyst Laura Martin writes, adding that she is lowering her first-quarter search travel ad-spending estimate down by $1 billion and her second-quarter estimate down by $3 billion, "owing to COVID-19."

Estimating that about 11% of Google's search ad revenues come from the travel category, reduced her outlook for the search giant's earnings to 4% for the first quarter and 10% for the second quarter, but she added that Needham is retaining its "buy" rating for Google stock.

"We assume consumer spending and travel ads are back to normal by the second half," she concluded.

Earlier this week, GroupM issued a report indicating tremendous uncertainty for the Coronavirus' impact on advertising, but did not revise its official forecasts.

Publicis' Zenith unit also indicated it was poised to issue a downward revision due to its impact.

ad spending, digital, earnings, forecast, google, search, search marketing, travel

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