Key Updates From Alphabet’s Q3 Earnings Call For Marketers
Explore highlights from the Q3 Alphabet earnings call, including what marketers need to know about the latest in ads, AI, and search.
Highlights
Alphabet Inc., the parent company of Google, recently held its third-quarter earnings call for 2023, shedding light on the performance of its major products and services. The transcript of the earnings call reveals the positive impact of Alphabet's investments in AI and new generative search capabilities on its business, with significant implications for marketers and advertisers.
Search Advertising
Google Search ads continue to be the primary driver of Alphabet's revenue, with a notable 11% year-over-year increase in Search and other ad revenues, totaling $44 billion. This growth was particularly prominent in the retail sector, where AI-driven solutions like Performance Max are optimizing ad campaigns across various Google platforms, enabling retailers to boost conversions and return on investment (ROI).
In preparation for the holiday season, Google will equip retail marketers with planning tools and insights to tap into seasonal shopper demand. Additionally, they will expand the number of deals in their Search platform to connect users with relevant promotions. The introduction of new ad formats, powered by generative AI, will craft personalized, high-quality ads tailored to each step of the user's search journey. Notably, nearly 80% of marketers are already embracing AI-powered Search ad products.
Video Advertising
YouTube advertising revenues also saw robust growth, increasing by 12% year-over-year to reach $8 billion. This growth was primarily driven by demand from both brands and direct response advertisers. Connected TV watch time and monetization are on the rise, solidifying YouTube's position as the leading streaming destination.
Creators and brands are benefiting from new AI-powered creation tools and ad products, including expansions in formats like Video Reach Campaigns and the introduction of new offerings like Demand Gen Campaigns. These innovations are delivering lower costs per action and increasing reach and views for advertisers. The subscription business for YouTube, encompassing YouTube TV and YouTube Music Premium, also experienced substantial revenue growth.
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Google Bard and SGE
Alphabet is heavily investing in generative AI across its various products, including Search and cloud services. Bard, an experimental conversational interface to large language models, now offers personalized answers by integrating information from multiple Google services. The Search Generative Experience (SGE) employs generative AI to enhance the Search platform. User feedback has been positive, and the capability is being expanded to more markets, creating opportunities to serve a broader range of search needs and generate multiple high-quality perspectives.
Google also has plans to test new ad formats, offering advertisers the chance to connect with customers through generative AI search features.
Implications for Marketers
Alphabet's earnings report demonstrates the company's commitment to AI-driven innovation, aiming to enhance productivity and creativity in search and video advertising campaigns. As Alphabet continues to refine products like Bard, SGE, and Performance Max, marketers stand to benefit from improved ad personalization, creativity, and efficiency.
However, advertisers must remain agile and adaptable to changes, particularly those related to user privacy and the increasing automation driven by AI. By harnessing Google's AI capabilities and closely monitoring their impact, advertisers can capitalize on new advertising opportunities and experiences, ultimately building brand awareness and maximizing their return on investment (ROI).
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