Google’s advertising revenue grew more than 18% in the second quarter, as more digital ad dollars shifted toward the search giant’s strengths of mobile search ads, YouTube ads and programmatic advertising, the company reported today.
“Advertising revenues benefited from the strong performance insights, which was led in particular by tremendous results in mobile search with a strong contribution from YouTube,” said Ruth Porat, Alphabet’s chief financial officer, during a conference call with analysts. “Healthy growth and network revenues was driven by our programmatic business. ”
Machine learning is a critical element that enables Google to help advertisers and app developers analyze data in real time to reach consumers with useful ads and measure their campaign effectiveness, said Google CEO Sundar Pichai. For instance, at Google Marketing Next the search giant launched Google Attribution, a measurement tool that enables marketers to measure the impact of their campaigns across devices and channels.
“With 90% of transactions still happening offline, we want to help consumers find what they are looking for in brick and mortar stores,” he said. “Our store visits technology is instrumental and understanding customer behavior that starts online and ends in store.”
Ads across Google-owned properties and its ad network are key drivers behind that growth. Paid clicks across Google’s sites and advertising network rose 52% in the second quarter compared with the same period a year ago.
On Google-owned sites, such as its search engine and YouTube, the number of paid clicks rose 61% year over year, while increasing 15% compared with the first quarter. Google adjusted the way it measures paid clicks and the cost per click in the first quarter, which likely had some affect on the year-over-year comparisons. During the first quarter, the change produced a “modest increase” in paid clicks and a “modest decrease” in the cost per click, Google says.
The average cost per click on a Google ad across all formats and venues fell 23% compared with the same period a year earlier. On Google sites alone, the cost per click fell 26% year over year, while the cost per click on Google Network Members’ websites decreased 11%.
Key to Google’s continued growth is its ability to evolve, Pichai said. “People are no longer only using a keyboard, mouse and multi-touch, but are also using emerging inputs like voice and camera to ask questions and get things done in the real world,” he said. “We are seeing this in the way people interact with the Google Assistant, which is already now available on more than 100 million devices since launching last year and there is more to come.”
For the second quarter ended June 30, Alphabet reported:
- Advertising revenue of $22.672 billion, up 18.4% from $19.143 billion a year earlier.
- Google-owned sites, such as its search engine and YouTube, generated $18.425 billion in revenue, up 19.6% from $15.400 billion.
- Net income of $3.524 billion, down 27.7% from $4.877 billion, which was largely due to the EU fine.
- Google’s traffic acquisition costs, which is what Google pays to websites that host Google ads, rose to $5.091 billion, up 28.1% from $3.975 billion
For the first half of the year, Alphabet reported:
- Advertising revenue of $44.083 billion, up 18.6% from $37.163 billion a year earlier.
- Google-owned sites, such as its search engine and YouTube, generated $35.828 billion in revenue, up 20.5% from $29.728 billion.
- Net income of $8.770 billion, down 3.5% from $9.084 billion.
- Google’s traffic acquisition costs, which is what Google pays to websites that host Google ads, rose to $9.718 billion, up 25.2% from $7.763 billion.