INTERNET AD REVENUES CLIMB, CONFOUNDING EXPECTATIONS

Facebook and Google reported stronger-than-expected ad sales in this year’s first quarter.
Analysts had expected sales to plummet as businesses closed or scaled back activity during the global economic paralysis.
Three-quarters of advertisers and media buyers expected the media market to be worse than that of the Great Recession, according to a March survey by the Interactive Advertising Bureau, with 25 percent of respondents already having canceled any ad buys they could.
A surge in buys by e-commerce and video game companies, however, offset declines in other categories.
The surge was boosted by Facebook’s 16-percent cut in ad rates. Twitter dropped its prices by 19 percent.
“Advertiser budgets are retreating from any long-term investment in their brands,” said Joseph Evans at Enders Analysis. “The only campaigns that are surviving are those that contribute to cash flow today. Google and Facebook are best in class.”
Snapchat announced it will make investments in its direct-response ad system sooner than expected to take advantage of “bright spots” in the current ad market.
Twitter reported a 27-percent drop in ad revenues from 11 March through 31 March as the company continued to root out bugs in its ad management software.
None of the companies are willing to predict their second-quarter performance.

Skip to content