Here’s What Marketers Should Note From Google’s Second-Quarter Earnings
Strong demand from advertisers powered yet another better-than-expected quarter
Photo: Marcio Jose Sanchez/Associated Press
Strong demand from advertisers powered yet another better-than-expected quarter for Google parent Alphabet Inc.
Alphabet’s revenue, fueled almost entirely by Google’s advertising business, grew 21% from a year earlier to reach $21.5 billion in the second quarter. Profit jumped 25%.
Here are the most important takeaways for marketers from the online ad giant’s earnings call:
Google says it has figured out mobile
The main driver for Google’s second-quarter revenue growth was mobile, the company said, specifically from mobile search.
“Our investment in mobile now underlines everything we do today,” said Google Chief Executive Sundar Pichai. “All of the momentum you’re seeing is because our [ad] products are doing well in mobile.”
The company didn’t disclose how much of its revenue now comes from mobile, but according to marketing technology firm Kenshoo Ltd., advertiser spending on mobile search ads increased 63% in the second quarter from a year ago, outpacing 10% growth in search-ad spending, The Wall Street Journal reported.
Growth was driven by Google’s owned sites, not its network
Much of Alphabet’s revenue growth during the quarter came from the sites Google owns, such as its search engine and YouTube, rather than its network, through which it places advertising on sites and apps owned by other companies.
Revenue from Google sites grew 24% during the second quarter, compared with just 3% revenue growth across Google’s network. Any growth on the network side was largely a result of “strong growth of programmatic,” said Ruth Porat, chief financial officer for Alphabet and Google.
YouTube is seeing strong ad growth
Advertiser interest in YouTube is picking up, Mr. Pichai said, including for its premium video ad offering called Preferred.
“It’s tough for us to assess whether it’s coming from TV or if advertisers are investing more, but we see strong momentum,” Mr. Pichai said.
The company is also seeing strong growth in mobile video, Mr. Pichai said, describing video as “the killer app” on mobile. “On mobile alone, [YouTube] reaches more 18-49-year-olds than any TV network. The growth is very strong, and being driven by mobile.”
Write to Jack Marshall at Jack.Marshall@wsj.com
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