- Google’s promoting business grew revenue 11% 12 months over 12 months to $64.62 billion in Q2, in line with an earnings statement shared by parent company Alphabet.
- Search and other, the company’s largest promoting segment, was up 14% YoY to $48.51 billion, reflecting strong demand from retail and financial services. YouTube, its video platform, grew revenue about 13% to $8.66 billion, under analyst estimates.
- Google is enacting major changes that can impact promoting, including implementing more generative artificial intelligence (AI) into core products like search. The tech giant this week also reversed its decision to deprecate third-party cookies in Chrome, a change that was expected to shake up digital marketing.
Google dropped an earth-shaking little bit of promoting news Monday with its surprise pivot on cookies, potentially overshadowing its earnings. The company’s financial results were strong on the profit and revenue fronts, though YouTube grew lower than expected, with a rate of growth lower than the search business. YouTube in Q1 was measured against a tougher year-ago period than Q2, which executives said helps explain a few of the revenue deceleration.
YouTube can be passing the anniversary of a price hike for its connected TV service YouTube TV, a key a part of its future video growth strategy. Third-party evaluation has indicated that YouTube TV lost subscribers to the tune of about 150,000 in Q1, Business Insider reported. The impact of the pricing increase “will persist through the balance of the 12 months,” CFO Ruth Porat said on a call with investors discussing the Q2 results.
AI continues to be within the highlight as Google spends heavily to maintain pace with the tech sector’s latest arms race. The company released 30 latest AI features for advertisers in Q2, touching across search, shopping and the automation-driven Performance Max campaigns.
Google’s initial implementation of generative AI responses in search encountered challenges, producing off-putting and inaccurate results that the platform needed to scramble to deal with. Ad placements currently appear above and below AI Overviews, and Google plans to soon start testing more sponsored ads directly throughout the window within the U.S.
Asked about Google’s AI initiatives on the investor call, CEO Sundar Pichai said he was “pleased” with how the technology has been additive to go looking from a consumer perspective.
“We are seeing progress on the organic side. Obviously, monetization is something that we’d need to earn on top of it,” Pichai said.
Executives were also questioned concerning the decision to now not deprecate cookies within the Chrome web browser, a project Google has been working on for 4 years — inclusive of multiple delays — with the goal of constructing a more privacy-safe web. Privacy Sandbox, Google’s proposed alternative to cookies, got here under sharp criticism this 12 months from each regulators and promoting trade bodies, culminating in Google reversing course earlier this week.
Pichai said Google will proceed work on Privacy Sandbox but reiterated Google’s position that it’s shifting focus to place user selection first in terms of enabling cookies, a tracking technology that helps goal promoting around the net.
“We’ll each improve privacy by giving users selection, and we’ll proceed our investments in privacy-enhancing technologies,” said Pichai. “But it’s obviously an area we will likely be taking feedback from the players within the ecosystem, and we’re committed to being privacy first as well.”
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