Google Ad Sense: 2019 Slowing Google Digital-Ad Growth
Google Ad Sense 2019 Digital-Ad Growth
Since the inception of digital ad, Google has dominated the digital ad market for almost the entirety of its existence, with its first quarter earnings report suggests that competitors may began to experience tremendous growth profits, ease of doing online digital ad marketing which will lead to expansion of competitors like Media.Net, Propeller Ads, RevContent, Pop Ads, just to mention a few.
How Google Digital-Ad Slowing Growth Happened
The stock of Google’s parent company, called the Alphabet has been pushed down by investors. more than 7% in after-hours trading Monday 29th, April, 2019 after it reported revenue that fell short of analyst expectations.
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That dip shift could also sweep more than $65 billion from Google’s parent company, the Alphabet’s market value if it hold when the markets open.
Google’s advertising revenue, its key moneymaker, grew by 15 percent to $30.7 billion slower than investors had predicted and hoped. Its digital-ad rivals facebook and Amazon, meanwhile, both reported strong earnings last week, adding to the investor surprise when Alphabet stumbled despite a strong economy.
Alphabet executives deflected concerns of growing competition on a conference call with analysts on Monday, instead suggesting that fluctuating currency rates and changes to Google ad products during the quarter led to the slowdown.
The online-ad industry had also shifted to phone and tablet ads and away from ones aimed at desktop users. More so, Ads for mobile devices bring in less money.
I want to say, what I think make Google’s Alphabet’s profit to be slow could be the nature of Google’s infrigement as result many had suffered damage and loss. Many people might think is because of the fine.
Well this is Google’s third antitrust fine by EU in 2017, 2018 and 2019 $1.7 billion. But that can’t be the reason because only Alphabet’s can pay all the fines without stress.
Google also provides brokerage services through tailored agreements that contained at least one of three types of restrictions such as: exclusivity provision, Premium Placement and Google’s websites approval, that harmed competition.
These different types of restrictions often overlapped in time. But competitors will always have their own way to survive.
As bloggers and websites owners find it extremely difficult to get approval from Google, I believe they decided to shift their interest to the likes of Media.Net, FaceBook Ads, Amazon Associates, RevContent, that alone can significantly reduce the profit of Google’s parent company, the alphabet.
More so, the results sparked concerns that Google’s enormously profitable advertising machine might began to fluctuate. Some analysts suggested it’s a signal that Google might need to diversify its business more quickly.
Dan Ives, Wedbush Securities analyst said “Does this put more pressure on Google to make more aggressive bets on cloud?” Google executives highlighted the company’s cloud-computing business as one of its fastest growing segments during the Monday call.
But the cloud currently accounts for only a small slice of Alphabet’s overall revenue. The company reported $5.4 billion in “other” revenue, which includes cloud, hardware and Play Store purchases.
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Hardware sales also slowed during the quarter for the Pixel phone, Google chief financial officer Ruth Porat said on Monday’s call, reflecting a broader industry slowdown in smartphone sales which is just about one-fifth of Alphabet’s profit.
Alphabet reported a first-quarter profit of $8.3 billion, down 6% from $8.9 billion in the year-earlier period. Profit amounted to $11.90 per share, well above Wall Street estimates of $10.60.
That figure doesn’t include an expected charge of $1.7 billion to account for a European Union antitrust fine. The fine was imposed on 20th March, 2019, in Brussels, for anti-competitive practices in Google’s advertising business, referring to a specific exclusivity practice Google now says it has ended.
Google and Facebook, along with other internet companies, are feeling rising heat from regulatory bodies around the world as people and governments question their privacy practices. Some regulators express concern that the largest companies are so big that they’re stifling competition.
Including the fine, Alphabet’s profit of $6.7 billion fell short of analyst estimates. Excluding advertising commissions that Google pays to customers, Alphabet’s overall revenue was $29.5 billion also falling short of the $30 billion analysts were expecting.
Alphabet also reported widening losses in its “Other Bets” category a broad segment that includes experimental ventures such as self-driving car business Waymo and internet-balloon subsidiary Loon. Losses grew to $868 million from $571 million a year ago.