Google’s advertising business soared more than 20% in the third quarter, thanks to the search giant’s dominance of search—and mobile search in particular.
Google accounted for 95% of all mobile organic search-driven visits during the third quarter, according to digital marketing firm Merkle’s “Digital Marketing Report Q3 2018,” which was released earlier this week.
In addition to driving organic traffic to retailers’ websites, Google also drives a large share of consumers to click on paid search ads. Google reported Thursday that paid clicks on ads on Google-owned properties, such as its search engine and YouTube, jumped 62% compared with the same period a year ago and 10% over the previous quarter.
The average cost per click on a Google ad on Google-owned properties fell 28% compared with the same period a year earlier.
The search giant says the number of impressions across Google-owned properties and its ad network rose 1%, and the cost per impression on those properties rose 11%.
Key to its growth is its enhancement of its advertising offerings, said Sundar Pichai, Google’s CEO, during a conference call with analysts. “Advertisers love that we are bringing our machine learning strengths to offerings like responsive search ads and universal App Campaigns to create more effective ads,” he said. “One new example is smart shopping campaigns, which use signals like seasonality and price to optimize where ads are shown. Tens of thousands of advertisers are using this and seeing an average of 20% more sales for the same budget.”
He also pointed to Shopping Actions, which enables retailers to list their products in sponsored listings adjacent to regular search results, in the Google Express shopping service and in its Google Assistant app that’s available within smart speakers such as Google Home and on smartphones. “This allows people to move seamlessly from browsing to buying with a universal card that works across Google search and our system,” he said.
For the third quarter ended Sept. 30, Alphabet reported:
- Advertising revenue of $28.954 billion, up 20.3% from $24.065 billion a year earlier.
- Google-owned sites, such as its search engine and YouTube, generated $24.054 billion in revenue, up 22.0% from $19.723 billion.
- Net income of $9.192 billion, up 36.5% from $6.732 billion.
- Google’s traffic acquisition costs, which is what Google pays to websites that host Google ads, rose to $6.582 billion, up 19.6% from $5.502 billion.