Alphabet has just reported Google’s advertising revenue, indicating that the revenue rose 43 percent to $53.13 billion. These figures affirm that Google has been the market leader in online advertising for well over a decade.
Importantly, the data suggests that Google is successfully overcoming the new limits on tracking mobile users and that online shopping is as popular as ever heading into the Christmas season.
Operating through the YouTube video service together with various strategic partnerships across the Internet, Google sells more online advertising than any other technology company.
Looking into the financial figures is Sarah Gounder, Director of Legal at Iterable, a cross-channel marketing platform. In reviewing the figures, Gounder considers privacy regulations and their impact on advertising spend.
Gounder sees a divide between those companies that are taking consumer privacy seriously and those that are floundering, noting: “The uptick in privacy regulations impacting companies like Snap and Facebook should come as no surprise; consumers have growing sensitivity about their data use. Tech companies like Alphabet and Apple are answering their call for protection.”
The lesson from this, Gounder says, is that: “Any company whose revenue is tied to digital ad spend will not be immune to these issues. Alphabet included. But scale is in Google’s favor here; the company’s size, and Cloud momentum, is positioning Google well for continued ad spending recovery.”
In terms of future market dynamics, Gounder speculates: “While ad spend is the concern of companies like Facebook and Snap in this earnings cycle, it’s not the primary issue for Alphabet. Instead, Google’s headache is a bit heavier: abuse of power, and resulting antitrust scrutiny.”
What does this “abuse of power” refer to? Gounder says that: “After an unredacted Texas lawsuit revealed that Google gets a whopping cut of 22 percent to 42 percent of U.S. advertising spending, developers, regulators and lawmakers are concerned about accessibility.”
There are also things happening on the legislative front, notes Gounder: “The Open App Markets Act —now in the Senate — intends to give power back to app developers, and may result in decreased revenue for Alphabet moving forward.”
