Google Inc. grew its paid clicks on ads across its sites 30% in the second quarter of fiscal 2015, and 18% across Google sites and those in its advertising network, the search giant reported on Thursday
That growth, the company says, reflects the continued success of YouTube’s TrueView ads, in-stream ads that allow viewers to skip an ad before it ends while providing advertisers with a higher-quality advertising experience by drawing in a more engaged audience.
“We’re seeing great adoption of our video ad formats like TrueView and continue to help marketers engage and connect the consumers in new ways,” chief business officer Omid Kordestani told analysts, according to a transcript of the call obtained from Seeking Alpha. “The number of advertisers running video ads on YouTube is up more than 40% year over year and for our top 100 advertisers, the average spend per advertiser is up over 60% year over year.”
The cost per click on Google-owned sites dropped 16% year over year and on Google sites and those in its ad network the cost per click declined 11%.
The search giant reported revenue of $12.402 billion from its websites, up 13% from $10.975 billion during the same period last year. Part of that growth can be attributed to Google’s push to improve its search engine for mobile users, Kordestani told analysts on the company’s Q2 earnings call that searches on mobile devices now eclipse those run on desktop in 10 countries, including the United States and Japan.
“As shopping experiences on these smartphones become easier and we focus on improving mobile conversion for advertisers, we are seeing great benefits from that,” Kordestani said. “We just announced Purchases on Google, for example, the smartphone-only feature of the product listing ads an example.”
Google’s mobile cost per click is climbing, helping to close the gap with desktop ads, chief financial officer Ruth Porat said.
“Specifically on mobile, we’re pleased with our ongoing progress resulting from our focus on user experience, ads quality and online to offline commerce initiatives,” she said. “The combination of these efforts improves the effectiveness and value of mobile for users and marketers alike.”
Kordestani went on to provide an example of Google’s success with paid mobile search ads.
“Target, one of our advertisers, found that mobile search ads greatly influence in-store store sales, and using our store visit data they found that a third of their paid search ads resulted in a user visiting a Target store during 2014 holiday season,” he said. “So we love to continue working with them and other advertisers to show the results and then build on that.”
“Google remains one of our top Internet picks for 2015, with what we believe will be continuing favorable growth and more stable margins,” wrote analysts Colin Sebastian, Benjamin C. Gaither, and Andrew Lee with Robert W. Baird and Co.
For the second quarter ended June 30, Google also reported:
- Net revenue of $17.727 billion, up 11.1% from $15.955 billion during the same period last year.
- Net income of $3.931 billion, up 17.3% from $3.351 billion during the same period last year.
- Traffic acquisition costs, or money that Google pays sites that host its ads, of $3.377 billion, up 2.6% from $3.293 billion during the same period last year.
- Google network revenue, which is generated from clicks on ads placed on other companies’ websites, including retailers, of $3.621 billion, up 2% from $3.550 billion during the same period last year.
For the first six months of fiscal 2015, Google reported:
- Net revenue of $34.985 billion, up 11.5% from $31.375 billion during the same period last year.
- Net income of $7.446 billion, up 10.8% from $6.722 billion during the same period last year.
- Revenue generated through Google websites of $24.334 billion, up 13.7% from $21.404 billion during the same period last year.
- Google network revenue of $7.197 billion, up 1.5% from $7.091 billion during the same period last year.