DoubleClick Bid Manager Volume Doubled In Past Year, Google Q3 Revenue Up 20%

google Q3Google’s Q3 revenue rose 20% year over year to $16.52 billion, though it continued to see click volume rise (17% YoY) and cost per clicks fall (2% YoY).

Google sites comprised about two-thirds of revenue, for a total of $11.25 billion. Partner sites contributed $3.43 billion, or about 20%.

Google’s O&O paid clicks (which include YouTube's TrueView products and ads on its Maps and Finance pages) increased 24% year over year, while paid clicks within its network increased just 2%.

The numbers disappointed Wall Street, which expected slightly higher earnings per share. In after-hours trading, the stock price fell 2%.

During the earnings call, CFO Patrick Pichette introduced Omid Kordestani as the permanent chief business officer. Kordestani had served as interim CBO after Nikesh Arora left the role last quarter for a position at SoftBank Corp.

Kordestani joined Google in 1999 and built the business side. He left in 2009, but served as an adviser to CEO Larry Page before stepping into the role of CBO.

Kordestani pointed out the growth in Google's programmatic platforms, with impression volume on DoubleClick Bid Manager, the DSP formed from the acquisition of Invite Media, doubling in the past year.

On the publisher side, Kordestani said the number of private exchanges doubled from the previous year as publishers turned to private exchanges to generate revenue from premium ad space. Google signed publishers FOX TV and Edmunds this quarter, Kordestani said.

Google also highlighted its efforts in performance marketing, "the core of our business," Kordestani said, as well as its forays into brand marketing.

On the performance side, Google is trying to make mobile inventory more valuable through better attribution and better ads, as well as through its AdMob mobile exchange through which app developers drive return traffic. One feature involves placing a deep link in a search ad, so developers can reach out to users who've neglected their app.

Kordestani also highlighted the "estimated total conversions" function that lets marketers measure value of multiscreen advertising. While brands discovered that mobile display campaigns drive 15% more revenue, it's unclear if this results in more spend directed toward Google advertising products. Kordestani claimed it was "too early to figure out the impact."

He also defended Google's decision not to break out the difference between mobile ad revenue and display ad revenue. "It took years for desktop to get the right ad formats to work for the platform," Kordestani said. Still, "growth in [mobile] volume and pricing are long-term trends."

Another long-term trend is the popularity of YouTube. Earlier this week, Google announced it sold out of preferred inventory on YouTube in the US for the rest of the year, signaling the overall strength of the video market. The announcement still left some insiders skeptical.

On the call, Google noted that the sellout of YouTube inventory in the US has spurred interest elsewhere, including the UK, France, Germany, Japan and Australia. “We want to make digital the best possible canvas for creative and effective brand-building campaigns," Kordestani said.

ABC executed a "digital-first marketing plan" for their fall TV lineup, Kordestani said. The ad plan included custom five-second ads with TrueView and "collaborations with homegrown YouTube stars."

As Google works on developing its branding capabilties, it faces competition from Facebook, which announced cookieless cross-device tracking with its relaunched Atlas ad server. “We are going to study what Facebook announced and figure out what is the right approach for us," Kordestani said.

Google acquired Adometry, an attribution solution, in May, which could help with some of that attribution functionality. But Kordestani said it will be a while before an "end-to-end solution" develops, such as one that integrates Adometry into the DoubleClick platform.

 

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