A new report suggests that Google U.S. ad revenues this year will fall for the first time in more than a decade, while rivals Facebook and Amazon see continued growth. 

The report, published Monday by research group eMarketer, says it’s the first time Google’s U.S. digital ad revenue will decline since it began tracking the company in 2008. And while Facebook and Amazon will continue to see growth, they will do so at a severely depressed rate when compared with previous estimates.

The COVID-19 pandemic ushered a significant drop in consumer demand for travel services, which in turn has hit the search giant's bottom line particularly hard, says Nicole Perrin, principal analyst at Insider Intelligence at eMarketer.

“Google's net U.S. ad revenues will decline this year primarily because of a sharp pullback in travel advertiser spending, which in the past has been heavily concentrated on Google's Search ad products,” Perrin said in a statement. “Travel has been the hardest-hit industry during the pandemic, with the most extreme spending declines of any industry.”

Overall, Google’s net U.S. digital ad revenue will fall a smidgen over 5 percent to about $39.6 billion, according to eMarketer. “That brings Google’s share of the U.S. digital ad market to 29.4 percent, down from 31.6 percent last year,” the research group says. The company adds that pre-COVID-19 estimates said Google’s ad revenue would actually grow about 13 percent in 2020.

Amazon, Facebook to steal market share

Although Amazon sees strong demand for its search advertising products, it doesn’t cater to the travel industry, which partially explains why the company's ad business has proven to be so resilient thus far, eMarketer says. 

Google, on the other hand, will see its U.S. search ad revenues decline about 7 percent this year. Its overall market share will also fall from about 61 percent to nearly 59 percent, according to eMarketer. 

Although Google’s market share will experience a decline, Facebook and Amazon will actually see an increase, eMarketer says. 

Facebook will grow its U.S. digital ad revenues by nearly 5 percent to $31.4 billion this year, with Instagram fueling much of that growth. Its share of the digital ad market will also grow slightly, from about 22 percent to 23 percent in 2020. 

It remains to be seen whether Facebook's bottom line will be impacted by calls for a July ad boycott, which so far includes The North Face, REI and Patagonia, all of which have taken issue with how Facebook handles hate speech, propaganda and misinformation. Historically speaking, Facebook has come out unscathed following previous scandals such as Cambridge Analytica. Its stock is also trading at an all-time high.

Meanwhile, Amazon will increase its U.S. ad revenue to $13 billion this year, a 23.5 percent upswing when compared to the previous year, eMarketer says. Like Facebook, its market share will grow from about 8 percent to 9.5 percent this year. 

Overall, the total U.S. digital ad market will grow 1.7 percent to about $135 billion this year. Google, Facebook and Amazon as a whole will gain just .2 percentage points from the long tail of the market, the smallest gain in a decade, according to eMarketer.