Former product manager at Google LLC
- Google’s (NASDAQ: GOOGL) advertising offerings and revenue mix and growth across Search, YouTube, Shopping and Apps
- Impact of current uncertain/recessionary economic backdrop on Google and related ad budgets and planning, noting how companies are adjusting budgets, particularly heading into the Q4 holiday season
- Influence of Apple’s (NASDAQ: AAPL) privacy-related advertising changes on Google and competitors
How does the process work when Google is engaging with an entity for ad spend? You mentioned you were focused on ads and budgets during your time at the company, and there was a suite of tools and functionality that allowed different folks to gain insight to that budget, how it’s being spent and how it’s performing. How core was that offering, how important was it in terms of working with many customers and what types of customers are typical here?
Due to uncertain and potentially recessionary economic conditions, companies are pulling back on their advertising spend. How has that been impacting and how will it impact Google through H2 2022 and 2023? You mentioned that budgets are set, but then they’re adjusted.
Given the evolving economic conditions, some folks might be realising that, “We’re not really getting the ROI on some of this spend that we previously got and want to get, so we want to make some adjustments,” and to your point, “everyone seems to be talking about a recession, we’re seeing that in how our ads are converting, so we’re going to pull back on ad spending.” How do you think the average marketer using Google’s products is perceiving the current set of economic circumstances?
Many people are wondering how companies are adjusting ad budgets. Do you think it’s reasonable to expect that a lot of companies are pausing budgets, and perhaps even cutting them? You also mentioned thinking about pauses or changes and how far into the future those can range, meaning can I decide now about spending that’s taking place on the platform tomorrow? How much lead time do I need to be able to say, “I need that USD 1m and so I’m just going to take it off the platform,” and how much of it is already spoken for? What lead times do you typically see when it comes to Google Ads spending and how important is that? I would imagine companies are adjusting due to the economic uncertainty and we’re still in summer.
Many companies are ramping up their Q4 and holiday shopping season ad planning. What about ad campaigns on Google and Google platforms and products? Do those start days, weeks or months before the holiday shopping season? How much flexibility do companies have and employ in that context?
You referenced recent changes by Apple, alluding to iOS 14.5 and IDFA [Identifier for Advertisers], implemented in summer 2022, and how that’s impacted all of digital advertising in one way, shape or form. What impacts from those would you highlight are most important across the industry and for Google more specifically? Many believe that Google, on a relative basis, has benefited, for a variety of different reasons. It could just be that other competing platforms and products are not as well-positioned to deal with that kind of environment. How long should we expect to see this? A specialist in a previous Interview [see Digital & Social Media Advertising – Q2 2022 Update & H2 2022 Outlook – 18 March 2022] noted that one of the impacts of IDFA is we’ve seen rising CPMs but falling ROI, which is a large generalisation, but a theme many are mindful of.
What is Google’s ad revenue mix from its four buckets – Search, YouTube, Shopping and Apps? What do you think the breakdown would be among those four by 2025?
When you talk about YouTube and it being an underdog, I think what you’re alluding to is the continually massive opportunity with it. Given a mature business has a benchmark of 20% growth, what type of growth should YouTube be delivering annually over the next three years? Is it 1.5x that, or is it double that?
How should we think about growth in Shopping and Apps? I would imagine Shopping had a big surge over the last couple of years, and for a variety of reasons that could be levelling off. What growth do you think is reasonable to see into 2025, acknowledging pandemic-related issues and difficult comparisons? You highlighted Amazon. Walmart is really upping its game when it comes to related advertising. Google is, in many respects, seen as an underdog in Shopping too, right?
What are your thoughts on growth in Google’s Apps category?
There’s been a lot of news lately about AppLovin and that it’s trying to buy Unity, which is trying to buy IronSource. My understanding is that Google may be participating in real-time bidding for these platforms. What are your thoughts on these platforms? One of their value propositions is their reach. Google has very substantial, perhaps in some respects unmatched, reach, but how do you look at that category? It seems there’s a lot of volatility and that it’s the most volatile area of the four buckets we discussed.
Apple made advertising-related changes that were somewhat telegraphed, but which had huge impacts. Its ads business has performed well, by many accounts. How has that shaped how Google thinks about implementing similar changes? The company communicated in July that it’s looking to remove third-party cookies from its browsers in H2 2024. How does it balance those considerations? On one hand, it wants to embrace privacy, and it sees the changes Apple made and what has followed, which is tremendous growth in its advertising business. On the other hand, it already has a very large advertising business in a lot of constituencies, and we’ve seen a lot of folks get caught in the cross-hairs and it doesn’t want that.
YouTube’s Chief Business Officer, Roberty Kyncl, was announced to be stepping down in early 2023. With all the opportunity YouTube has, it’s perceived as not having executed a couple of areas when competing with TikTok more, one of which is YouTube Shorts. Are there any structural issues with YouTube specifically that make Shorts a less interesting or exciting product from a monetisation perspective?
The Google Ads business is comprised of performance ads and brand ads. What is the revenue mix of both?
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