Coronavirus Dents Travel Advertising; Olympics In The Balance

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Hang On St. Christopher

Google’s travel advertising business (along with the travel marketing vertical in general) could be severely disrupted by the impacts of COVID-19, the disease caused by the new coronavirus. Spending on travel search ads may drop by $1 billion in Q1 and $3 billion in Q2, most of which would have been spent on Google, according to estimates from Needham & Co. analyst Laura Martin. Travel ads make up 10% of all search ads and accounted for $10.7 billion of Google’s $98 billion search revenue last year, Bloomberg reports. Ad budgets are usually the first to go when a recession threatens growth, and pressure on airline and travel stocks indicate a culling across the board for travel advertising activity. Martin, however, is keeping a buy rating on Alphabet stock as she predicts travel advertising will rightsize by the second half of 2020. More.

Olympics In The Balance

With major events across the world being called off due to the spread of COVID-19, the advertising industry is starting to wonder what the potential fall out would be if the 2020 Tokyo Olympics is canceled. Television advertising is largely propped up by cyclical events such as the Olympics, a key tentpole of live TV viewing, and the broadcast industry will suffer a major blow if the games do not go on, Business Insider reports. NBCUniversal, which already sold $1.5 billion in ad commitments against its broadcast of the games, said that the impact of a canceled Olympics would be small, as it has insurance on commitments and would redirect that budget across its portfolio. But NBCU was banking on the Olympics as a major advertising vehicle for sign-ups to its new streaming service, Peacock, which was timed to launch this spring as hype for the Olympics grows. The network would also have to refill its schedule with different programming that could put a dent in ratings. "If things change with the Olympic scheduling and presentation, that is a huge gaping hole in the NBCUniversal universe," said Tim Hanlon, founder and CEO of Vertere Group. More.

Cleaning Supplies And Demand

Cleaning supplies and some basic household items have been flying out of stock in stores and on Amazon. And the coronavirus-prep boom has thrown into stark relief the pricing variations between ecommerce and brick-and-mortar retail. “There is no place for false claims and price gouging on Amazon,” Amazon VP of worldwide customer trust Dharmesh Mehta said at a congressional hearing on Wednesday, reports The Wall Street Journal. Except … Amazon is precisely the place for price gouging. An Amazon search for “hand sanitizer” on Thursday returned top options including a $350 two-pack of one-liter bottles of Purell, which is $22 at Walmart (though it’s also out of stock at Walmart), Vox reports. Brands such as Purell and Clorox that manufacture disinfectant aren’t the ones surge-pricing products. That would be third-party sellers. “Amazon lets consumers experience market effects directly, resulting in seeing high prices which could be interpreted as price gouging,” said Justin Leigh, a former Amazon employee and CEO of Amazon marketing services firm Ideoclick. “Other retailers maintain price but have no product to sell.” More.

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