Digital advertising is sitting at some extent of uncertainty as tariffs roil the economy and artificial intelligence (AI) disrupts the ecosystem. Those threats didn’t ding Google’s performance in Q2 2025.
Search and other, the corporate’s largest segment, increased revenue nearly 12% yr over yr to $54.2 billion while YouTube notched a 13% YoY gain to $9.8 billion. Overall Q2 ad revenue got here in at $71.3 billion, up 10.4% over the year-ago period, in accordance with an earnings report from parent Alphabet.
Search experienced growth “across all verticals,” CFO Anat Ashkenazi said on a call discussing the outcomes with analysts, led by the retail and financial services industries. Google also continued to see consumer traction for its efforts to inject more generative AI features into the search experience.
By the numbers
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$54.2B
Q2 ad revenue for Google’s key search and other segment, which saw growth “across all verticals.” AI Overviews have yet to dent monetization
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2M
The variety of advertisers using Google’s generative AI tools to run ads. That base is up 50% over the identical period last yr
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40B
Hours of YouTube sports content now watched annually. Google is making live sports an even bigger priority for the video platform
AI Overviews, text boxes that streamline answers to queries using generative AI, are drawing over 2 billion monthly lively users (MAUs). A separate AI Mode for delving into longer-form, complex searches has over 100 million MAUs within the U.S. and India, where it is currently available.
“We see monetization at roughly the identical rate, which supplies us actually a very strong base on which we are able to then innovate and drive actually more progressive and recent and next-generation ad formats,” said Chief Business Officer Philipp Schindler when asked by an analyst concerning the impact of AI Overviews on search advertising.
Google has worked to place more AI tools within the hands of advertisers as well, including an AI Max for search suite of solutions that launched in May. Executives claim the features typically drive 14% more conversions for brands. Beyond campaign optimization, more firms are adopting Google’s generative AI products for advertising creative. The variety of advertisers using Google’s AI-powered asset generation tools is up 50% over last yr to 2 million, in accordance with Schindler.
“Google’s AI-powered products for advertisers, including AI Max for Search campaigns, Smart Bidding Exploration, Demand Gen, and Asset Studio are performing as expected, though they force advertisers to cede control and transparency in exchange for performance,” said Forrester Senior Analyst Nikhil Lai in emailed comments. “Nonetheless, they’ll proceed being adopted by agencies and types searching for more yield from crunched budgets.”
YouTube was also cited as some extent of strength in Q2 because the video platform becomes a more serious player in TV and as its TikTok lookalike, called Shorts, advances its approach to monetization and generates over 200 billion each day views. Shorts within the U.S. are actually earning as much ad revenue per hour watched as traditional in-stream video on YouTube, Google CEO Sundar Pichai said.
Executives referenced Nielsen data that show YouTube has grow to be the highest player in streaming, momentum that Google is attempting to extend into areas like live sports. YouTube will broadcast its first exclusive NFL game in September following season kick-off (its connected TV service, YouTube TV, also carries NFL Sunday Ticket). Consumers watch over 40 billion hours of sports content via YouTube annually, per Pichai.
Many questions still hang over Google’s business, which is contending with an antitrust crackdown, rising competition from AI rivals like ChatGPT and the potential for more concrete impacts from the trade war, should it dent advertiser appetites. Google is also heading right into a period where it will lap a deluge of political ad spending from 2024, which could lead on to unfavorable comparables.
“I feel it’s really too early to comment on anything [happening] within the second half of the yr,” said Schindler.
