Credit: Tim Mossholder via Usplash.jpg
As digital giant Google introduces more AI-driven solutions, its advertising on YouTube is seeing an increase in brand advertising.
Google said its June-quarter revenue beat expectations, growing 14% to $85 billion.
Advertising revenue reached $64.6 billion. Search increased 13.8% to $48.5 billion, and YouTube increased 13% to $8.66 billion.
Search was driven by growth in retail and financial services. YouTube ad revenue was driven by brand growth and direct response.
Some analysts pointed to slowing growth in YouTube, whose results came in about 3% below Wall Street expectations.
However, analysts at investment bank Jefferies called the results “solid” and said YouTube’s advertising revenue was within their forecasts.
They expect Google to grow further in the second half of the year, driven by continued strength in core search and the potential for Google Cloud to further accelerate AI.
Google CFO Ruth Porat said YouTube’s slower second-quarter revenue growth compared to the first quarter reflected tougher comparisons to the first quarter.
Google’s chief business officer, Philip Schindler, wants to make YouTube the best place to create, watch and monetize.
“What sets YouTube apart from other platforms is the connection between creators and their fans,” he told market analysts during a briefing.
“More and more viewers are tuning in to watch videos from their favorite creators. For example, two weeks ago, MrBeast’s channel surpassed 300 million subscribers.”
CTV (connected TV) news has grown more than 130% in the past three years.
According to Nielsen, YouTube has been the most-watched streaming platform on U.S. TV screens for 17 consecutive months.
“If you combine not just streaming but all the media companies and their TV viewership, YouTube is second only to Disney in viewership,” Schindler said.
โThis growth is happening across multiple verticals, including sports, with CTV watch time on YouTube up 30% year over year.
โYouTube CTV continues to benefit from a combination of significant growth in watch time, viewer and advertiser innovation, and a shift in brand ad budgets from traditional TV to YouTube.
“Some of the largest advertisers across industries, including retail, entertainment, telecommunications, home and personal care, partner with creators on advertising and organic integrations.”
US telecommunications company Verizon has teamed up with YouTube creators to showcase the different ways they can customise their plans and services.
They used AI-powered formats to create sketches of different lengths and orientations to serve the right creative to the right audience to drive people to the site. Schindler said Verizon’s Creator Ads have lower CPMs and a 38% higher conversion rate than other ads.
Google has announced over 30 new advertising features and products that leverage AI.
In Merchant Center, you can upload a product image, the AI โโwill prompt you, “Show this product against the backdrop of the Paris skyline,” and Product Studio will generate campaign-ready assets.
“We’re also receiving great feedback from customers on many of our other new AI-powered features,” Schindler said.
“We’ve been beta testing virtual try-on in Shopping ads with plans to roll it out more broadly later this year. Feedback has shown that the feature drives 60% more high-quality views than other images and higher click-out rates to retailers’ sites. Retailers appreciate the feature because it helps drive purchasing decisions and reduces returns.”
“Our AI-powered profit optimization tools have now been extended to Maximize Performance and standard Shopping campaigns. Advertisers using profit optimization with Smart Bid see an average 15% increase in profit compared to revenue-only bidding.”
“Demand Gen will be rolling out to Display & Video 360 and Search Ads 360 in the coming months with new image generation tools that create compelling, high-quality image assets for social marketers.”
Schindler cited luxury jewelry retailer Tiffany & Co., which used demand generation during the holiday season to drive a 2.5% increase in consideration and actions, such as adding items to carts and booking appointments. The campaign also saw a 5.6x more efficient cost-per-click compared to social media benchmarks.
Google’s marketing team used Demand Gen to create approximately 4,500 ad variations for the Pixel 8 campaign that appeared across YouTube, Discover and Gmail, doubling click-through rates at roughly a quarter of the cost.
“In just six months, we’ve seen a 10% increase in broad match performance for advertisers using Smart Bid, thanks to improved quality, relevance and language understanding from AI,” he said.
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