Please ensure Javascript is enabled for purposes of website accessibility

Facebook Ad Prices Down as Much as 50%, Warns NYT

By Rich Smith – Apr 15, 2020 at 9:56PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

For the first time in history, Google and Facebook revenue could decline.

The novel coronavirus is doing a number on the advertising industry, and on social media and other internet stocks that depend on selling ad space to support their revenue streams.

This is known.

Letter blocks read 2020 trends

Image source: Getty Images.

What you may not know, however, is precisely how bad the situation has gotten. In today's New York Times, however, the "Grey Lady" provides a few facts and figures to help give us an idea of the scale of the challenge that companies such as Alphabet (GOOG -1.39%) (GOOGL -1.40%), Facebook (META -1.69%), and Twitter (TWTR 0.43%) (and yes, other internet stocks as well) may be facing in the weeks, months, and quarters ahead.  

"Once-abundant travel and entertainment ads have all but disappeared from Google search," warns NYT today. "The prices for Facebook advertisements are at record lows."

Specifically, the paper quotes digital marketing agency Gupta Media's Alex Palmer stating that "the prices of Facebook ads have declined 35 percent to 50 percent on average in recent weeks." And turning to RBC Capital for commentary on Google, the paper reports that RBC "ran 50 Google searches last month and found no paid ads for travel and restaurants" -- not even when searching specifically for "Las Vegas Hotels"!

Indeed, according to the paper, certain companies have cut their internet advertising budgets all the way to zero in response to the pandemic, and the travel bans it has engendered. By mid-March for example, both Korean Air (air travel) and Norwegian Cruise Line (cruises) were spending exactly nothing on digital ads.

Result: annual revenues are now expected to decline at Google and Facebook "for the first time in the history of the two companies."

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors. Rich Smith has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Facebook, and Twitter. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Alphabet Inc. Stock Quote
Alphabet Inc.
GOOGL
$98.74 (-1.40%) $-1.40
Meta Platforms, Inc. Stock Quote
Meta Platforms, Inc.
META
$140.41 (-1.69%) $-2.41
Alphabet Inc. Stock Quote
Alphabet Inc.
GOOG
$99.17 (-1.39%) $-1.40
Twitter, Inc. Stock Quote
Twitter, Inc.
TWTR
$41.58 (0.43%) $0.18

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
329%
 
S&P 500 Returns
106%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/26/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.