The Covid-19 pandemic has not only had significant implications on health and lifestyles, but it has also significantly disrupted industries: notably Google and Facebook, and conventional media houses. These impacts range from a sharp decline in advertising revenues to cutbacks and job losses affecting thousands of employees across these sectors. This article explores in depth how Covid-19 has affected these sectors and their responses.
Implications of Covid-19 on the Media Sector
The media sector is grappling with financial hardships caused by an economic downturn brought on by the pandemic. These financial strains are primarily due to a reduction in advertising revenues – a significant source of income for many news outlets. An analysis by The New York Times revealed that the health crisis and its consequential economic effects have resulted in news outlets laying off approximately 28,000 employees.
Google and Facebook’s Aid to the Media Sector
In response to these challenges, internet giant Google announced its plans to set up an emergency fund aimed at assisting local news outlets struggling to maintain operations amidst the ongoing pandemic. Social media titan Facebook followed suit by pledging a $100 million donation directed to support news organizations worldwide that have been adversely affected by the Covid-19 pandemic.
Impact of Covid-19 on the Advertising Commerce of Google and Facebook
The advertising divisions of both Google and Facebook, which have seen roughly a threefold growth over the previous half-decade, are currently facing potential declines owing to the pandemic. Travel and entertainment advertisements, which previously dominated Google search, have dwindled considerably. Additionally, Facebook has experienced an unprecedented decrease in the prices of its advertisements, with costs declining by an average of 35% to 50% in recent weeks. Wall Street analysts have since projected that the annual revenues of both corporations are likely to decline for the first time ever this year.
Actions taken by Google and Facebook to Address Covid-19-related Challenges
In efforts to mitigate the negative implications of the pandemic, Google and Facebook have implemented several measures. Google began enforcing a “sensitive events” policy that limits ads related to coronavirus content. In response to a supply shortage affecting medical professionals, it also imposed a temporary ban on the advertising of masks as of March 9, 2020.
Similarly, Facebook has taken stringent steps to combat unscrupulous advertising during these challenging times. It has prohibited the placement of predatory ads for items such as masks, sanitizers, and other personal protective equipment. In line with this, the company has successfully eliminated nearly all mask advertisements across its social media platforms.