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30 October 2020

Tech Platform Ad Sales Bounce Back From Pandemic Decline

Google’s advertising sales have rebounded much stronger than expected, following a decline during the pandemic, the FT has reported.

Google’s earnings show their core search business has returned to growth, not long after the US government raised an antitrust lawsuit against them. Alphabet’s shares have also risen, as much as nine per cent higher after-market trading. This surprise upturn added more than $100 billion to Alphabet’s stock market value, which outperformed most outlooks from analysts.

The FT reported: “Sundar Pichai, chief executive, sought to play down the scale of Google’s outperformance, suggesting that it was only growing in line with the broader internet economy as more people go online to work, shop and entertain themselves.

“As a result, the company enjoyed “a strong quarter, consistent with the broader online environment”, he said.”

YouTube advertising, which also decreased during the pandemic, rose 32 per cent compared to a six per cent gain in the second quarter.

Apple similarly beat revenue expectations despite the delayed launch of the iPhone 12. They reported $64.7 billion in revenue in its fourth quarter, contrasted with the anticipated $64 billion.

Facebook’s revenues are also up more than 20 per cent, despite more than 1,000 brands boycotting the platform by pulling their digital advertising spend earlier this year. The FT reports that “Revenues in the three months to the end of September rose 22 per cent to $21.5bn, above analysts’ expectations of $19.8bn, according to estimates compiled by S&P Capital IQ.”

Amazon’s growth also reports a 37 per cent rise, with their online advertising growing by 51 per cent.

The recent AA/WARC Expenditure Report has shown UK ad spend is predicted to fall by 14.5 per cent year-on-year in 2020 and is not expected to fully recover until 2022.