eMarketer published its new forecast on advertisers‘ spendings until July 2020
Search ad spend in the US will fall by at least 8,7% in H1 2020. It’s estimated to drop $6 billion, reports eMarketer, a market research company.
This forecast for the first six months of the year is relatively optimistic. If the pandemic impact is severe, advertisers will cut their search ad budgets by almost 15%, which is $8 billion.
At the beginning of March, eMarketer reported that search ad spend would increase by 14.4% for all of 2020. However, a long-lasting quarantine forced the company to renew its forecast.
Although search ads seem to be a relatively safe marketing channel in recession, there are at least two reasons why spend on them will decline in 2020.
Firstly, search ads — including ones from online stores — are usually geared toward driving conversions. However, now, due to the quarantine and inventory shortfalls, these ads often do not lead to conversions. Secondly, budgets for search ads aren’t fixed so the advertisers can alter them at any time.
For instance, Amazon has partially suspended its shipment services in March. The company has also pulled back from spending on Google ads. It doesn’t want to drive additional demand for products that are almost out of stock.
That’s why Amazon prioritizes delivering products that don’t need advertising, for kids, pets, household, and self-care.
According to the IAB survey, 30% of Ukrainian publishers don’t see quarantine as a bad influence on the search ads. At the same time, almost 40% of Ukrainian buyers have cut their ad budgets by more than 30%.