Google search advertising outperformed its targets despite global ‘uncertainty’

Google search advertising outperformed its targets despite global ‘uncertainty’

Google search advertising outperformed its targets despite global ‘uncertainty’

Google

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  • A trio of Alphabet executives sounded caution on a call with investment analysts, using “uncertain” or “uncertainty” at least 13 times to describe the economy.
  • YouTube ad sales grew at their slowest pace since disclosures began in 2018.But investors focused elsewhere, notably on the fact that second-quarter sales from the company’s biggest moneymaker – Google search – actually topped expectations.
  • Shares of Alphabet jumped 5.5% in after-hours trading following the results.
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Google search ads lifted parent Alphabet Inc (GOOGL.O) close to Wall Street sales expectations on Tuesday, sending shares up on relief that the world’s biggest seller of online advertising may withstand a global recession better than smaller rivals.

A trio of Alphabet executives sounded caution on a call with investment analysts, using “uncertain” or “uncertainty” at least 13 times to describe the economy. YouTube ad sales grew at their slowest pace since disclosures began in 2018.

But investors focused elsewhere, notably on the fact that second-quarter sales from the company’s biggest moneymaker – Google search – actually topped expectations. Shares of Alphabet jumped 5.5% in after-hours trading following the results.

Investors breathed a sigh of relief despite the lacklustre quarter since expectations were so low, according to Jesse Cohen, senior analyst at Investing.com.

By contrast, shares of Snap Inc (SNAP.N) fell more than 25% last week after the company missed sales expectations and warned of an ad market slowdown.

Executives from Alphabet claimed that Google was not immune to the downturn, which was caused by customers experiencing product shortages, a decline in demand, and a number of other causes. Some ad buyers this year have been compelled to reduce marketing budgets due to growing wages, as well as the rising cost of petrol and other products.

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However, Google has fared better in hurricanes than social media firms. It generates income through a wider range of ad-market services, and as search advertising frequently only contain text, clients may find them to be less expensive to produce.

Due to the fact that search advertising are frequently targeted at consumers who are actively looking for comparable products and produce better results, clients occasionally give them priority.

The growth in search ad sales for Google during the second quarter, which totaled $40.69 billion and surpassed FactSet projections of $40.15 billion, was largely driven by travel and retail advertisers.

The total revenue reported by Alphabet for the second quarter was $69.69 billion, with 81 percent coming from Google’s ad division. This figure was almost exactly in line with the $69.88 billion average expectation of investment researchers polled by Refinitiv.

According to Insider Intelligence analyst Evelyn Mitchell, “Google is positioned reasonably well to weather the choppy waters that lie ahead.”

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