Google revenue

Google revenue rises to record recovery in ad spending

Dive brief:

  • Google’s revenue hit a record fourth quarter as marketers increased spending on paid search and YouTube advertising. Parent company Alphabet reported a 23% increase in revenue to $ 56.9 billion, with advertising revenue rising 22% to $ 46.2 billion, in part thanks to a 46% jump to 6, $ 89 billion for YouTube, according to its quarterly report.
  • YouTube now reaches over 18 to 49 years of age than all linear TV networks combined, while 70% of its viewers said they bought a brand after seeing it on YouTube, said Philipp Schindler, senior vice president of the director Alphabet commercial. during a conference call with analysts. Direct response advertising on YouTube continued to grow, while branded advertising maintained a recovery that began in the third quarter, he said.
  • The gains marked the second straight quarter of recovery from a recession in the second quarter, when Google reported the first decline in ad sales in its 26-year history as the pandemic dragged down ad spending. Alphabet’s profit jumped 69% to $ 15.7 billion, despite a loss of $ 1.2 billion for its cloud services unit, the results of which were first released.

Dive overview:

Google’s good results indicate that marketers increased their ad spend in the fourth quarter to reach consumers while they were shopping for holiday gifts. YouTube remained a bright spot for the company with its highest growth rate for the year as marketers sought to reach its growing audience. Alphabet CEO Sundar Pichai touted the company’s continued investment in YouTube to build on two key growth trends: live video and short media. The investment recognizes the growing popularity of platforms such as Amazon-owned Twitch in live streaming and the TikTok social video app in short videos.

“More than half a million channels were broadcast live on YouTube for the first time in 2020, from artists performing in their living rooms to churches moving their services online,” Pichai said. “Our new Shorts player videos receive 3.5 billion views per day. We look forward to expanding Shorts to more countries this year.”

In addition to the growth in YouTube ads, Google also recorded a 23% gain to $ 7.4 billion in ad revenue for members of the Google Network, which consist of publishers who sell ad inventory through the company middleman, and a 17% increase to $ 31.9 billion for paid search ads.

“All three of Google’s main advertising businesses have beaten our forecasts, including YouTube,” said Nicole Perrin, eMarketer analyst for Insider Intelligence, in statements emailed to Marketing Dive. “The strength in all three areas suggests that advertisers are turning not only to digital video ads as a flexible and addressable way to reach consumers with sight, sound and movement, but also to low-performance ads in funnel, as shoppers continue to rely on e-commerce during the pandemic. “

Google’s 22% ad revenue growth has not kept pace with new entrants to the digital advertising market who also recently released fourth quarter results. Facebook said its ad revenue jumped 31% from the previous year to $ 27.2 billion as marketers sought to reach consumers who increased their use of social media during the pandemic. With more people shopping online, Amazon said revenue from its business segment which includes ad sales jumped 64% from the previous year to nearly $ 8 billion.

While Facebook CEO Mark Zuckerberg has warned that Apple’s planned privacy changes could negatively affect its advertising revenue, Alphabet did not mention Apple in its investor presentations. Alphabet’s Schindler briefly discussed the company’s stance on privacy as part of its plans to phase out support for third-party cookies in the Chrome browser by next year. Alphabet is developing an alternative to audience tracking technology as part of its Privacy Sandbox initiative.

“We truly believe the Privacy Sandbox is the best way forward, and we remain very committed to working with the ad community on open standard privacy-preserving mechanisms that can, what we call, support a healthy, publicly funded web. publicity, ”Schindler said. .

Google is also facing several antitrust lawsuits, including one of 10 state attorneys general who accused the company of anti-competitive business practices in online advertising. Google refuted the claims last month in a detailed blog post by Adam Cohen, the company’s chief economic officer.