Google keeps sharpening its focus on the advertising and mobile worlds, but turned in somewhat lackluster results for its first quarter.
This story first appeared in the April 17, 2014 issue of WWD. Subscribe Today.
The search giant, which released its first-quarter earnings late Wednesday, said revenues increased 19 percent to $15.4 billion — slightly short of analyst projections of $15.54 billion. Profits from cost-per-click declined 9 percent over the preceding quarter, but increased 26 percent year-over-year.
Video and high-quality digital programming are continuing to become more important — with Google property YouTube reaching more than one billion people a month. Nikesh Arora, Google chief business officer and senior vice president, told analysts on a conference call that “hugely popular” YouTube channels like that of lifestyle vlogger Rosanna Pansino played into the trend. Pansino has almost 1.6 million subscribers — and her videos on “How to Make a Rainbow Cake” and “Angry Bird Cupcakes” have garnered nearly 21 million and 16 million views, respectively.
“Marketers and agencies that have historically built their brands on TV are reorienting their creative planning and investments, [putting digital at] the center,” Arora said. “This year, nearly all Super Bowl advertisers turned to YouTube to extend life and reach of their Super Bowl ads,” Arora said, noting that Super Bowl-related ads on YouTube have been viewed more than 300 million times or approximately three times the audience that saw the ads on TV.
Arora also noted that brands are taking advantage of the company’s newest display ad formats. Tory Burch, for example, became the first fashion brand to use Google’s Lightbox ad format to live-stream its runway presentation in February — making the once-exclusive event sharable with more than seven million fans.
“We’re working really hard with creative ad agencies and large agency groups, as well as our advertisers, to say, how can we get ahead of the creative process, how can we help you see the brand campaigns actually start and end in digital?” Arora said. “I think this is definitely the Holy Grail.”
As for mobile, Google is firmly rooted in the belief that the format’s medium- to long-term pricing structure must be better than desktop pricing. Mobile has location on its side — as well as data on the user — and the better an advertiser knows its user, the more targeted ads they can provide them.
On the shopping front, PLAs, or product listing ads, seem to be working. These image-driven ads have contributed to growth in Google’s shopping vertical, providing detailed information about the product searched for and directing the consumer to a Web site or point of purchase.