Search still drives the majority of revenues, but emphasis is on display and mobile potential.
Google's display and mobile ad businesses are generating $2.5 billion and $1 billion in revenues, respectively, on an annualized basis, the company said during its quarterly earnings call today.
SVP of product management Jonathan Rosenberg said, "People ask us what the next multi-billion business is after search, and the answer is display," he said. Despite the strong growth, he said search is "still the most monetizable side of the Internet.
According to Nikesh Arora, Google's president of global sales operations and business development, the company's display ad network its now among the top three in the world. He added the company expects much of that display inventory to migrate to rich media or video formats over the next few years. "We're very excited about display," he said.
In announcing its third quarter earnings today, the company reported substantial growth in revenues and profits. The strong results reinforced the IAB's assertion earlier in the week that the online advertising market has returned to health following the economic turmoil of 2009.
Google's revenues reached $7.3 billion in the three months ending September 30th, representing 23 percent growth over the same period last year. The company said its net income for the quarter reached $2.2 billion, representing 32 percent growth. Revenues from Google's owned and operated sites grew 22 percent during the quarter, as did those from its network of ad partners. Paid clicks increased 16 percent year-over-year, while average cost-per-click increased three percent in the same period.
In reference to the Instant search product the company released last month, Rosenberg insisted the introduction was driven by user experience, and not financially motivated. "We didn’t launch instant to make more money. From a revenue standpoint its impact has been minimal, and from a resource standpoint it's actually quite expensive... Instant wasn’t introduced based on a narrow financial calculation," he said.
Although Google enjoyed substantial growth in the U.S. market, its performance lagged slightly elsewhere, with international revenues totaling 52 percent in the third quarter, compared with 53 percent in the same period in 2009. CFO Patrick Pichette said that fact pointed to a slower economic recovery in markets such as the U.K., which contributed 12 percent of its revenues over the quarter.
Learn Digital Marketing Insights From Leading Brands!
ClickZ Live Chicago (Nov 3-6) will deliver over 50 sessions across 4 days and 10 individual tracks, including Data-Driven Marketing, Social, Mobile, Display, Search and Email. Check out the full agenda, or register and attend one of the best ClickZ events yet!
Jack Marshall was a staff writer and stats editor for ClickZ News from 2007 until August 2011.
Hong Kong, October 21-22
London, November 13-14
San Francisco, November 13-14
London, November 18-19
IBM Social Analytics: The Science Behind Social Media Marketing
80% of internet users say they prefer to connect with brands via Facebook. 65% of social media users say they use it to learn more about brands, products and services. Learn about how to find more about customers' attitudes, preferences and buying habits from what they say on social media channels.
An Introduction to Marketing Attribution: Selecting the Right Model for Search, Display & Social Advertising
If you're considering implementing a marketing attribution model to measure and optimize your programs, this paper is a great introduction. It also includes real-life tips from marketers who have successfully implemented attribution in their organizations.
October 23, 2014
1:00pm ET/10:00am PT