Google is facing a lot of criticism from travel companies after its refusal to work with them over issues of advertisement spending.
Due to the coronavirus pandemic, many travel companies are facing huge economic adversities. First of all, many tourist spots and travel destinations are on lockdown. Now, these companies are asking Google to work with them in creating an advertisement relief package.
Travel companies are paying Google millions in advertisement fees. Due to the pandemic, these travel companies are losing a lot of revenue and cannot sustain to pay these fees. Now, they are asking Google to at least work out a lenient payment structure until they can wear out the storm.
Travel companies in dire straits
Travel companies are asking Google to create a flexible payment structure for its ads. These companies are at their rope’s end, with some taking drastic measures like furloughing their staff.
In a letter sent to Google, the German Startups Association writes:
“By selectively enforcing strict payment terms on larger partners – especially from the travel and transportation industry – for its services provided to the market those products, Google is opting out of sharing the responsibility to do right by consumers.”
The German Startups Association counts notable startups as its member. Among those members are Trivago, HomeToGo, Dreamlines, Tourlane, Omio, GetYourGuide, Homelike, and FlixBus. The letter adds that the startups paid at least $80 million in ad revenues for the first quarter of 2020.
The startups are asking Google to “share the burden.” The global pandemic has governments around the globe imposing lockdowns, essentially closing all tourist and travel destinations. Some startups are bearing the brunt of the pandemic so badly that they are forced to shut down their service overnight.
Google’s economic influence
trivago CEO message regarding COVID-19
"We know there is a lot of uncertainty with the effects of the coronavirus (COVID-19) being felt around the world… For us, the well-being and safety of our global community is our first priority." https://t.co/ISiGYFhVv9
— trivago (@trivago) March 18, 2020
Google parent company, Alphabet, is easily one of the biggest in the world. According to its recent earnings report, Alphabet’s advertisement business is slowing down. However, it is important to note that the company still reports more than $41 billion in revenue for this quarter alone.
Advertisement remains as the primary cash cow for Google’s parent company. With smaller startups asking for relief during this time of extreme crisis is fairly reasonable.
Almost every facet of the tech industry is suffering from losses due to the pandemic. However, many financial experts believe that Alphabet feels less economic stress compared to smaller startups. With billions of dollars on its revenue stream, Google can easily withstand the brunt of the coronavirus pandemic.
Image courtesy of Ali Jabber/Shutterstock