There are many different businesses suffering as a result of the coronavirus crisis. It seems the online ad business will not go unscathed either. Facebook ad sales could take a dip in the future if the crisis keeps going on for long enough. The same goes for Google’s ad business. Facebook and Google have dominated the online ad industry for a very long time. However, both tech giants could have very rough waters ahead. This is because companies that are being negatively impacted by the crisis might not be as willing to spend money on advertising on Facebook or Google.
It is no secret that the economy is in very bad shape right now. The stock market is in the toilet. Therefore, companies need to treasure every bit of revenue they can get. In tough times, one of the first things that companies usually do is to reign in ad spending. If it gets to the point where many companies that usually advertise on Facebook or Google are not doing it any more, the bottom line of both companies will be impacted. These tech giants are in no danger of going out of business. However, their shareholders will not be very happy campers if the value of their stock drops as a result of lost ad revenue.
Small businesses will be the first ones to stop their Facebook advertising until these tough times are in the past. Facebook and Google might have to adjust to attract new advertisers and keep current ones. It is very possible that they might offer lower rates for their ads. However, that remains to be seen. The old principle of supply and demand will come into play. When Facebook ads are no longer in great demand, logic would say that the price will come down. However, Facebook and Google have not made any announcements on decreasing ad prices.
It will be interesting to see how long certain companies keep advertising if the virus crisis keeps dragging on for a month or more. There will eventually come a time for all companies when they realize that they are cutting into their very limited profits by advertising on Facebook or Google. Neither of the companies have issued any public statements about this. They certainly do not want to plant the seed of stopping advertising. They want companies to spend as much as possible on ads in the future.