Last week, Google’s parent company Alphabet shared some surprising news – big gains in fourth-quarter results. The company shared that it was due to strength in advertiser spend and strong consumer online activity and substantial ongoing revenue growth from Google Cloud. But what stood out? The search ad revenue gains.
Taking a Look at the Numbers
Let’s take a dive into the numbers shared on the Alphabet Inc. 2021 Fiscal Report.
- Overall, their fourth-quarter revenues were $75 billion, up 32% year over year. But, taking a closer look at Google Search and other categories, it came in at $ 43.3 billion, a 35% increase for the same quarter in 2020!
- YouTube ads also saw improvements year-over-year (YoY), bringing in $8.3 billion.
- Total Google advertising was up 32.5%, YoY.
- Alphabet’s total revenue which came from Google advertising in 2021 was a whopping 82%!
Check out the screenshot below of the categories reflecting the yearly differences.
Google isn’t the only one in the space with yearly gains. It’s competitor, Microsoft saw yearly growth too. On their Earnings Release FY22 Q2, Microsoft only reported $3 billion in revenue from Search and news advertising revenue during the same period. So, what does this all mean?
Reasons for the Growth
We spoke with a member of our team and wanted to get their take on the numbers from Alphabet’s and Microsoft’s fiscal reports.
The numbers prove that more people are investing in search advertising. This makes sense because our economy has been moving more towards digital retail buying and it has been even further accelerated during the pandemic. Also, given that it’s been two years since the start of the pandemic, this is likely not just a trend – we’re never going back. “– Amanda Grow, Marketing Lead, Chacka Marketing
Alphabet had some reasons for the overall growth. Sundar Pichai, CEO of Alphabet and Google, said: “Our deep investment in AI technologies continues to drive extraordinary and helpful experiences for people and businesses, across our most important products. Q4 saw ongoing strong growth in our advertising business, which helped millions of businesses thrive and find new customers, a quarterly sales record for our Pixel phones despite supply constraints, and our Cloud business continuing to grow strongly.”
“Retail was the largest contributor to year-over-year ad growth. Media and finance spending was also significant,” said Philipp Schindler, Google’s chief business officer.
Do you have any predictions about the future of search advertising or Alphabet’s growth in the advertising business?