Home Investment Google Touts Traction With Mobile Ads, YouTube’s TrueView In Q4

Google Touts Traction With Mobile Ads, YouTube’s TrueView In Q4

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Google had a strong showing in Q4, its first quarter airing results under an entirely new segment-based reporting structure.

Google’s holding company Alphabet reported $21.3 billion in Q4 2015 revenue, an 18% increase YoY. Google itself saw $21.2 billion in quarterly revenue (an 18% YoY increase) and $74.5 billion for FY 2015. Read the release.

Breaking down the Google segment, its Q4 ad revenue was $19 billion (a 17% YoY increase), its owned websites netted $14.9 billion (20% YoY), its network of sites got $4.1 billion (7% YoY), and “other” Google revenues were $2.1 billion (24% YoY).

While paid clicks were up 31% between Q4 20154 and Q4 2015, CPCs declined 13% in that same period. Alphabet said growth in paid clicks indicated its ads, especially mobile, were more relevant and better optimized than before.

Programmatic and video in particular showed promising growth, said Google CEO Sundar Pichai, citing viewability advancements through third-party measurements, as well as Google’s skippable TrueView ads, as a big driver.

Not surprisingly, he also called YouTube a “must have for brand marketers,” adding that YouTube reaches more 18-40 year olds than any cable network. 

Mobile also drove marked growth. In the week leading up to Black Friday this last holiday shopping season, more than 60% of impressions bought or sold programmatically through DoubleClick came from mobile.

“Mobile was the key driver [of meaningful growth across geographies], but YouTube and programmatic continue to deliver strong growth for us,” said Ruth Porat, CFO of Alphabet.

Pichai added that Google’s strength in mobile search was due to ongoing improvements in mobile ad formats and delivery, which boded well for the search giant during the most recent holiday shopping season.

“We’ve found that consumers purchase gifts using their mobile devices at spare moments throughout the shopping season,” he said. “About 30% of all shopping purchases now happen on mobile … and we saw  [mobile ad revenue] from [Google Shopping Ads, formerly Product Listing Ads] exceed desktop on Black Friday, Thanksgiving and throughout the holiday weekend.”

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Although Google’s CPCs have been decelerating or otherwise stagnant, the company has attributed any volatility around Google sites to the surge in newer YouTube formats, such as TrueView, which doesn’t register a skipped ad as a “click.” So although consumers like the format, Google’s still figuring out the best way to monetize the format.

“YouTube has very healthy revenue growth and the story is still evolving on monetization,” Porat said. “We’re focused on getting larger offline budgets to move to YouTube. It’s a very attractive platform for brand marketers given the growth in viewership.”

How many viewers? Pichai said there’s well over 1 billion monthly active users, with more than 80% of those views happening outside of the US.

But YouTube isn’t Google’s only “1 billion monthly active user” milestone. Along with Google’s major consumer offerings that include search, YouTube, Android Maps, Chrome and app store Google Play, Gmail joined the ranks last quarter in terms of user momentum.

“We want to be in a position where we are helping users throughout the day [to meet their core] information needs across all our products,” he said.

Although Alphabet has a slew of big-picture, future-focused products under commercial development, Google is focused on proving out the possibilities for new monetization and improved user experience across its apps, Pichai said.

A self-driving car is the polar opposite of a search ad, but Pichai noted practical examples of how Google is beginning to link the offline world to the connected.

“Our local inventory ads help stores like Lowes and Target determine how much foot traffic their search ads drove,” he said, noting the “millions of dollars in incremental sales” driven from the mobile format.

Alphabet’s shares shot up 9% in after-hours trading as the company, for the first time, rivaled Apple’s market cap.

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