Source: AdAge
Google is still raking in marketing dollars from advertisers, propelling the online search giant to another strong quarter in the face of costly regulatory trouble in Europe.
Parent company Alphabet reported second-quarter revenue, minus partner payouts, of $26.24 billion during the second quarter. Google’s advertising business grew 24 percent, most of which came from mobile and automated ads.
Google has continued to give search ads more prominent space on mobile phones, helping to fuel the brisk sales growth. Spending on Google Shopping search ads, which let marketers promote consumer products, increased 31 percent in the second quarter from a year earlier, according to data from digital marketing firm Merkle.
Alphabet reported two different profit figures to account for a $5 billion fine the European Union imposed last week for violating competition law with Google’s Android mobile software. Google plans to contest the ruling. Even including the record fine, the company generated $3.2 billion in net income during the second quarter.
Google also shrugged off the General Data Protection Regulation. Similarly, analysts don’t expect EU antitrust probes to force changes that significantly dent Google earnings. “The Android fine may suggest that peak regulatory risk is now in the rear view mirror,” Mark Mahaney of RBC Capital Markets wrote in a note.
A larger share of Google’s ad revenue went to its own digital properties, including the search engine and video service YouTube, rather than outside websites that run its ads. Google properties revenue jumped 26 percent to $23.3 billion. That leap reflects a recent push by Google to get marketers buying across more of its advertising channels.
Some in the industry also cite GDPR, which convinced more advertisers to funnel ad spending to Google and its main rival Facebook Inc. “One of the unintentional consequences of GDPR is the strengthening of the duopoly,” said Gil Elbaz, a former Google executive who now runs the marketing firm Factual. “If Google continues to go unchecked, their dominance will be extreme.”
