Google's Programmatic And Mobile Revenue Surged in Q2

googleq2

Google cited strong growth in revenue from its DoubleClick unit, YouTube and mobile search in second-quarter earnings reported Thursday.

Total revenue for the quarter was up 11% year over year (YoY), somewhat less than the 22% reported for the same period in 2014. Read the earnings release.

"Our strong Q2 results reflect continued growth across the breadth of our products, most notably core search, where mobile stood out, as well as YouTube and programmatic advertising,” said new CFO Ruth Porat in a statement.

Google and analysts on the call appeared fixated on YouTube. Porat and Chief Business Officer Omid Kordestani said securing more high-end ad budgets for YouTube would be a priority moving forward as “brand dollars follow the migration from TV to digital.”

Kordestani noted that YouTube watch time is up 60% YoY and the average viewing session is 40 minutes.

Though Facebook was not invoked directly, Google’s emphasis on the duration of YouTube user sessions, which Porat described as “the most valuable metric of engagement” for digital videos, suggests it sees the metric as a way to differentiate from Facebook’s video content.

One concern circling around YouTube in recent months has been the potential migration of top stars to other platforms or MCNs, which is perhaps why Kordestani framed the TrueView product’s success as a way Google is “delivering more for its creators.”

On the mobile side, Google saw strong growth for its owned and operated apps. Google Hangouts and Google Chrome each crossed 1 billion downloads in recent weeks, the company’s 11th and 12th products to reach that milestone.

But the most important mobile stats came from the growth of search advertising and the overall utility of mobile as a marketing platform. The company highlighted rising costs per click, saying “mobile continues to close the gap with desktop."

Porat pointed to the “the immediacy and local nature of [mobile searches]” as a key reason for Google's strong performance in the retail sector, for which it released a host of new ad products on Wednesday to go along with local inventory ads and direct commerce buttons.

Porat and Kordestani said network paid clicks were down 9% YoY, but that this was in line with expectations as the company shifts resources to higher-quality ad experiences. Google’s decision to adjust its search algorithm in order to catalyze mobile development has apparently paid off, as rising user experience rates drove up the value and price of mobile ads.

Google also said foreign exchange rates (i.e., a strengthening dollar) cost the company more than $1.1 billion this quarter alone.

 

Add a comment

XHTML: You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>