Alphabet Inc., Google’s parent company, reported higher advertising revenue in the third quarter of 2023, year on year.
An 11.3% gain in search revenue was accompanied by an increase in revenue for YouTube ads (12.5%).
Google’s advertising network was down 2.6%, however, this was an improvement on the 5% loss reported in the second quarter of 2023.
“The fundamental strength of our business was apparent again in Q3, with $77 billion in revenue, up 11% year over year, driven by meaningful growth in Search and YouTube, and momentum in Cloud. We continue to focus on judicious capital allocation to deliver sustainable financial value,” said Alphabet Chief Financial Officer Ruth Porat.
Google’s ad revenue increased by $5.17 billion from the previous year, while YouTube ad revenue was $7.95 billion, up from $7 billion in 2022.
Although results surpassed analysts’ expectations, the single-digit growth percentage for total ad revenue suggests that digital ad spend has yet to fully recover to its former glory. Experts forecast that double-digit growth should return by the final quarter of 2023.
Why we care. The stronger-than-anticipated results could indicate a positive trend where trust and confidence in digital advertising are stabilizing after the economic downturn. This is excellent news for digital marketers, as it hints at potential ad spend growth, particularly as we approach the crucial holiday season in the next quarter.
What Google is saying. Sundar Pichai, CEO, said in a statement:
“I’m pleased with our financial results and our product momentum this quarter, with AIdriven innovations across Search, YouTube, Cloud, our Pixel devices and more. We’re continuing to focus on making AI more helpful for everyone; there’s exciting progress and lots more to come.”
Earnings report. You can read Alphabet’s full third quarter 2023 results report for more information.
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