The internet advertising giants mainly say that April was better than March for the online advertising market, but none of them seem to know if that trajectory will last longer in the spring.
Pinterest Pins Inc.,
reported better than expected first quarter revenue on Tuesday, but costs rose with more users signing up with its scrapbooking and photo pinning service. The share fell more than 16% in after-hours trading, the toughest reaction to date to an ad-based internet company after Facebook Inc. FB,
FB,
Alphabet Inc. GOOG,
GOOGL,
and Snap Inc. posted stock gains after their reports; only Twitter Inc. TWTR,
had declined so far.
Executives at these companies all reported a significant advertising slowdown in March – Alphabet CEO Sundar Pichai described the first three months of the year as “a story of two quarters,” with March being completely different. January and February – with various hazards or observations. how was April.
Facebook said it had “stable” ad revenue in April, since last week, and Alphabet’s chief financial officer said Google had not “seen a further deterioration in the percentage decline in a company’s revenue. year over year. Twitter executives told analysts that the March revenue model, in which ads fell 27% from March 11 to 31, gave a good idea of ​​what things looked like. Snap Inc. SNAP,
Executives said that in the second quarter, revenue growth was 15% through April 19 and 11% in the week of April 26.
Pinterest’s latest earnings report gave it a solid figure for the month of April as a whole: Ads are down 8%. Managing Director Ben Silbermann spoke about the different product categories and industries where Pinterest sees more advertising and consumer interest, and which areas are on the decline, such as event planning and travel.
“Advertising dollars keep up with people and their planning activities, and that’s why we’ve seen varying amounts of spending, as people plan how to home school their kids, how to exercise at home, how to exercise at home. home, how to teach themselves how to cook. These are new events that we’re seeing some spending drift away from and away from things like wedding planning, travel events, et cetera, â€he said.
Read more about Alphabet revenue here, Facebook revenue here, Twitter revenue here and Snap’s earnings here
Each business is affected differently by downturns in various industries and by the ad mix that is most prevalent on its service. Right now, many advertisers, for example, don’t want their ads to run alongside COVID-19 news or other ads, so they’re cutting spending based on intent amid searches for these. information on Google.
Google and Facebook both have huge and diverse mixes of advertisers, from small businesses to giant airlines and hotels, all of which are suffering badly from this economic crisis. Firms with a narrower base are more at risk – Twitter said it was more exposed to consumer packaged goods, technology, telecommunications, media and financial services, and tended to have less advertising in travel and planned purchases.
“Some of the hardest hit verticals, like travel, automotive and restaurants, have been significantly affected, but these are relatively lower exposure for us,†said Pinterest chief financial officer Todd Morgenfeld.
The five companies declined to give specific guidance for the second quarter, a sign that they fear the strong deceleration trend of March will return, or at least in some pockets of the industry hardest hit by the pandemic of coronavirus and social distancing. Investors are wondering if the improvements in April will continue and show a reversal from the decline they experienced in the first quarter.
