While Forrester analysts are not financial analysts, and cannot comment on financial or stock performance, we can comment on the strategy or challenges that a public company is facing. I think there were a few headlines from Google’s earnings report:
- Mobile continues to drive growth. This has been the main driver for advertising revenue for Google for a few years now. Google reported a 52% increase in clicks on paid ads on its property, but a 23% decrease in average cost per click. This is the telltale sign that mobile is behind the growth, because mobile paid search ads are typically cheaper than their desktop counterparts. From an advertising perspective, this is all goodness: more people are clicking on your ads and you aren’t paying as much for those ads.
- Voice search is looming in the background. Google has not made much fuss about voice search in most of its earnings calls. The main focus around intelligent agents like Google Assistant is that Google needs to vastly improve the experience and make Google Assistant more useful to the customer. Google Assistant still has a few hurdles to get to a point where it can do more than just offload simple tasks from consumers. Once it is able to take a complex ask and perform a complex task, my bet would then be that Google would pursue monetization tactics on Google Assistant.
- Advertisers keep creepin’ on back. YouTube content issues and EU fines have slightly tarnished Google’s image, but not their wallets. Most advertisers have looked past some of the issues that have made it into the news and continue to spend on the search giant’s properties. The big question going forward: will this trend continue? If a viable contender to the current duopoly of Google and Facebook arises, will marketer’s appetite be strong? From our perspective, there is hunger for another ad giant (cough, Amazon, cough) for advertisers to put money into for customer acquisition.
Let me know what you think and if you have any questions. I look forward to hearing from you!