google-q1-profit-2020

Google Q1 Profit 2020: Mobile Traffic, Youtube Ads, Youtube Memberships, And Cloud Saved The Day (For Now)

  • Google Ads was driven by mobile traffic, yet changed users’ behaviors and reduced advertising budget slowed it down: The overall growth Q1 was primarily driven by increases in search queries (given the increased user adoption and usage during COVID-19) especially on mobile devices, growth in advertiser activity, and improvements in ad formats and delivery. Revenue declined in March driven by a change in behaviors of users, shifted to less commercial topics, and reduced advertisers’ spending.
  • YouTube Ads was driven by brand advertising: Growth was driven by the direct response and brand advertising products, thanks to improved ad formats and delivery and increased advertiser spending. March was slower due to the impact of COVID-19.
  • Network members’ revenues were driven by AdMob: The mobile platform AdMob primarily drove revenue grown nonetheless the decline in revenues in March due to COVID-19.
  • GPC drove Google Cloud revenues: Google Cloud, primarily comprises of Google Cloud Platform (“GCP”) made of infrastructure, data, analytics, and other services; G Suite productivity tools; and other enterprise cloud services. The growth was primarily driven by continued strength in our GCP and G Suite offerings.
  • Google’s other revenues were primarily driven by YouTube subscriptions and Google Play

What’s happening next?

Google core business model is primarily driven by advertising, therefore:

  • We might see the further impact of the pandemic on Q2 financials
  • The data so far confirms increased traffic and searches, yet also reduced advertisers’ spending and changed users’ behaviors (queries might be less commercial)
  • That is why Google has announced aggressive cuts to its marketing budget to focus on strategic activities
  • It has also announced the opening of its Google Shopping to (to prevent users to fly on other e-commerce platforms and to prevent to lose the forced e-commerce wave we’re living)

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Gennaro Cuofano

Gennaro is the creator of FourWeekMBA which target is to reach over two million business students, executives, and aspiring entrepreneurs in 2020 alone | He is also Head of Business Development for a high-tech startup, which he helped grow at double-digit rate | Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy | Visit The FourWeekMBA BizSchool | Or Get in touch with Gennaro here