Google is a good early warning indicator if marketers are cutting back on their marketing budgets.

What does it now show? It’s not good…

Advertising for Google has crashed.

Here are 5 things every President and Marketing Director should know…

#1: Google ad sales fell in the last quarter by 3.6% to $59.04 billion — The only reason total Google advertising revenue rose 1% to $76.05 billion was that Google raised its prices.

It shocked analysts who were expecting revenue to be $76.53 billion.

Google is the largest digital ad platform by market share and is an early indicator of recession as marketers cut back.

Their net income fell from $20.64 billion to $13.62 billion.

Their cloud product was the only thing that helped spark an upward trend in its revenue.

#2: YouTube pre-rolls fall — Revenue from YouTube ads, which has always been a moneymaker for Alphabet, fell $7.96 billion, an 8% drop. Well below the estimate of $8.25 billion, experts had expected.

#3: Google Troubles — Alphabet faces:

  1.  Less advertising revenue because they raised their prices.
  2.  Less advertising revenue because they have changed their marketing platform to be less responsive for marketers.
  3. Marketers are cutting back to only the best-performing ROI.

Google, the largest digital ad platform by market share, has responded by cutting over 12,000 jobs just last month, representing 6% of its workforce.

#4: Competition ahead — Alphabet’s biggest competition came from Microsoft, which will probably increase its stake in ChatGPT.

ChatGPT answers queries with human-like responses far better than Google and will take a large portion of Google’s search market share—Google has over 95% of all search results.

#5: What you should know — What this means for marketers:

  1. As ad costs rise, competition is less. This could be good for your ROI. Make sure your ads and landing page have the best direct response copy and strategy.
  2. It is unlikely with the continuing high inflation rate, but watch if they lower costs or have special deals.
  3. Check your strategy. Is it time to change how you advertise on Google?

Hopefully, Google/YouTube will become more flexible and open to better targeting and audience selection.

Need help in digital advertising? Need a 2nd opinion? Contact Michael at 615-933-4647.