While the COVID-19 pandemic has stung the online ad sales of nearly every big industry player, some of them are holding up a lot better than others.
Here’s an overview of what Alphabet/Google (GOOG) - Get Report, Facebook (FB) - Get Report, Amazon.com (AMZN) - Get Report, Twitter (TWTR) - Get Report, Snap (SNAP) - Get Report and Pinterest (PINS) - Get Report have shared about their March and April ad sales trends over the last couple of weeks, via their earnings reports and calls.
On Alphabet’s April 28 Q1 call, CFO Ruth Porat disclosed that her company’s “Google Search & other” revenue, which is dominated by search ad sales, was declining at a mid-teens annual rate at the end of March. For comparison, the segment’s revenue was up 9% over the whole of Q1, and 17% in Q4.
However -- in comments that gave Alphabet’s shares a boost -- Porat did add that Alphabet hasn’t “seen further deterioration” in its Google Search & Other growth rate in April.
YouTube ad revenue, which grew 33% over the whole of Q1, was said to be growing at a high-single digit clip at the end of March. Porat added that YouTube’s direct response ad sales, which involve ads meant to do things such as drive e-commerce transactions and app downloads, have remained strong in April, while its brand ad sales have “seen a continued decline.”
Google Network ad revenue, which involves ad sales on non-Google websites and apps, and carriers relatively low margins, was up 4% in Q1. Porat said Network revenue was declining at a low-double digit rate at the end of March.
Though they didn’t do anything to keep Alphabet’s shares from rising sharply the next day, Porat did attach some qualifiers to her April commentary.
“[A] few weeks obviously is not a quarter,” she said. “And given it is such an unprecedented environment, I would not extrapolate from these comments for the full quarter.”
Facebook’s ad revenue rose 17% annually in Q1, after growing 25% in Q4. Mark Zuckerberg’s firm indicated that ad sales fell sharply in March, but added that it has “seen signs of stability” in April, with ad revenue roughly flat on an annual basis during the first three weeks of the month.
With Facebook’s traffic up and its ad demand down, the company’s ad impressions rose 39% annually in Q1, while its average price per ad fell 16%. For comparison, impressions were up 31% in Q4, and price per ad down 5%.
CFO Dave Wehner did caution on Facebook’s April 29 call that current Q2 GDP forecasts raise the possibility that there could be “an even more severe advertising industry contraction” than what Facebook had seen to date.
Amazon’s “Other” revenue, the lion’s share of which consists of ad sales, grew 44% annually in Q1, an improvement from Q4’s 41% growth.
With a large portion of Amazon’s ad business involving product listings by Amazon marketplace sellers, the company’s ad sales are poised to hold up relatively well, even if they’re not completely immune to industry pressures.
“[We] did start to see some impact in March, some pull-back from advertisers and some downward pressure on price,” said CFO Brian Olsavsky on Amazon’s April 30 call. “But advertisers continue to advertise at a high clip. It wasn't as noticeable as maybe what some others are seeing, and it's probably offset a bit by the continued strong traffic we have to the site.”
Twitter, which had been dealing with ad product and targeting challenges prior to March, reported that its ad sales rose fractionally in Q1. However, the company added that from March 11 to March 31, its ad revenue was down 27% annually.
Moreover, on Twitter’s April 30 call, CFO Ned Segal declined on multiple occasions to provide an April revenue growth number. Rather, he only said that Twitter’s performance from March 11 to March 31 provides “a good sense to what it's been like for us.”
The Snapchat parent’s revenue, nearly all of which comes from ad sales, rose 44% annually in Q1, matching Q4’s growth rate.
On Snap’s April 21 call, CFO Derek Anderson said that Snap’s revenue was up about 58% in January and February, and about 25% in March. He added that Snap estimates its Q2 revenue growth was 15% as of April 19, and 11% during its most recent week.
In line with the guidance shared in an April 7 pre-announcement, Pinterest reported on Tuesday that its revenue rose 35% annually in Q1, after growing 46% in Q4. U.S. revenue rose 27%, while international revenue (still just 13% of total revenue) rose 136%.
However, in remarks that have contributed to a 13% Wednesday drop for Pinterest’s stock, CFO Todd Morgenfeld said that Pinterest’s April revenue -- though reflecting “stabilization” in its ad business following a “sharp deceleration” in late March -- fell 8% annually. He added that the decline would have been around 6% or 7% if not for a change in the Easter holiday’s timing.