Commentary
Google, Facebook Earnings May Offer Insight Into Digital Ad Market
- by April 27, 2020
They are among the top 10 companies that capture 76% of the digital ad market, according to the Internet Advertising Bureau, and are the first to experience sudden changes in media spending.
Some publishers, especially ailing local newspapers enduring significant declines in ad revenue
during the coronavirus pandemic, may be tempted to gloat at any signs of distress from the digital ad giants that have steadily eaten their lunch in the past decade.
Instead
of nurturing their schadenfreude, publishers should use this week's earnings reports as an opportunity to gather more information about their rivals — even if much of the management commentary
is puffery.
The most important information won't be about what happened in the first quarter, when digital ad platforms were more concerned about the chilling effects of
privacy regulations on their ability to deliver targeted advertising. The coronavirus wasn't considered a pandemic until mid-March, leading to a drastic curtailing of marketing activity.
It will be more interesting to hear about the current quarter, and whether Facebook and Google can share any information about the advertising trends they've seen in areas affected
by the pandemic -- and if there are any signs of a possible recovery. While neither company has significant operations in mainland China, where the pandemic originated, their global scope gives them a
sweeping view of its effects.
Amazon tends to be more tight-lipped about its advertising business, which will be overshadowed by a gangbusters report on ecommerce sales to
homebound consumers. The company is likely to report double-digit gains in ad sales, since the disruptions of the pandemic were so late in the quarter, when advertisers started to pull back.
advertisement
advertisement
Any information Amazon provides about best-selling products may be useful to publishers looking for pockets of strength.
Google's parent company Alphabet reports earnings on Tuesday, April 28, while Facebook will follow the next day. Amazon and Twitter will reveal their results on Thursday, April 30.
