Google could halve its marketing budget this year

Google plans to cut its marketing budget as the world’s largest advertising company cuts its own brand messaging amid the coronavirus pandemic.

Citing an internal email from an unnamed global director of the company, CNBC reported that Google is cut your marketing budget in half for the second half of 2020 and puts in place a hiring freeze for full-time and fixed-term employees.

A Google spokeswoman said: “As we highlighted last week, we are reassessing the pace of our investment plans for the remainder of 2020 and will focus on a number of important marketing efforts. We continue to have a strong marketing budget, especially in digital, across many business areas.”

Sundar Pichai, chief executive of Google’s parent company Alphabet, had signaled last week that Google would withdraw some investments for the rest of the year due to the pandemic. But the internal email suggests Google is holding back more than “essential non-commercial marketing,” as Pichai said in a memo to employees.

Google spent $18.5bn (£14.8bn) on sales and marketing and increased its workforce by 15% last year, according to Alphabet. annual report 2019. The company is expected to release its first quarter 2020 results in early May.

Michael Levine, an analyst at research firm Pivotal, said the disclosure was important because Google is an internet barometer and the company is “in the most educated position of any ad company we track, given of their longevity and the depth of their knowledge by seeing underlying data.”

“We had previously estimated that sales and marketing growth would slow from 13% in 2019 to 6% in 2020 given Covid – $19.6 billion from $18.5 billion in 2019,” Levine added.

A decrease in marketing spend would have a ripple effect on the many advertising and media agencies that Google employs. WPP’s Essence has made a name for itself as Google’s digital media agency, while OMD UK handles offline media buying. Its main consumer advertising agency in Europe is 72andSunny Amsterdam, while Publicis.Poke has been the main b2b creative boutique and R/GA London a preferred agency for digital projects.

Google also has in-house agencies, such as Brand Studio, which aims to communicate the internet giant’s vision and strategy, and Google Creative Lab, which is designed as an innovation and thought-provoking studio, and won industry awards such as the Cannes Lions Design Grand Prize Last year.

This story first appearance on campaignlive.co.uk.