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Sundar Pichai, President and CEO of Google Inc., speaks at the company's Cloud Next & # 39; 18 event in San Francisco, California on Tuesday, July 24, 2018. Source: David Paul Morris / Bloomberg Finance
Google's advertising revenue reached $ 29 billion in the third quarter, an increase of 18% over the previous year. Income, meanwhile, reached $ 9.5 billion, up almost 10% from the previous year. Nevertheless, the company continues to be paid by payments to partners such as Apple for making its search engine the default choice of browsers.
Here are four takeaways drawn from the call to Google today:
The research is not cheap
Every year, Google pays a royal ransom on traffic acquisition costs, or TAC, to companies such as Apple and FireFox, who have the privilege of being the default search engine of their respective browsers; For example, Apple would pay Apple $ 9 billion a year. Google said Thursday it spent about $ 6.6 billion in TAC fees in the third quarter, up 18 percent over the previous year.
Apple turns out to be a vital ally while being an opponent of Google
Apple's Safari browser, used by nearly half of US consumers, is making Google's life increasingly difficult, thanks to a recent update to its Intelligent Tracking Prevention initiative, launched last month. The feature greatly limits the frequency of tracking users. As a result, marketers are less able to target them through research.
According to the Merkle Digital Agency, Apple's ITP2 has prevented advertisers from using Google's remarketing lists for search ads (RLSA), which allows marketers to customize campaigns. search ads for people who have already visited their sites. RLSA click sharing dropped shortly after the entry into force of ITP2, according to Merkle, reaching its lowest level in seven months for the month of September.
On Wednesday, Apple CEO Tim Cook relied on Google, calling most of his data collection practices a "watchdog".
Amazon is eating away at Google
Monica Peart, an analyst at eMarketer, said that Amazon was attacking the Google advertising market.
"We are seeing a larger-than-expected slowdown in revenues from Google Properties, which represents its core business of research," Peart said in an email. "This is probably related to the rise of Amazon's competition, as consumers are turning more and more to the e-commerce giant for their product research."
Amazon is now the third largest advertising player and is behind Google and Facebook, according to eMarketer.
Overall, the revenue from the search was generated largely by Google Shopping Ads, which displays images of the products consumers are looking for. This segment generated 87% of all clicks on search ads in the third quarter, Merkle said.
The direct answer comes to YouTube
It's intended to serve direct response ads on YouTube. Sundar Pichai, CEO of Google, suggests that the company can attract travel marketers to attract consumers interested in flights or hotels.
The company announced its TrueView Actions format, which allows users to take action directly on YouTube during Advertising Week earlier this year. According to Pichai, viewers will now be able to download applications, book a hotel or travel in the same way.
"We always thought that a direct response would work well on YouTube and our instinct resists," Pichai said Thursday.
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