Keeping up-to-date with the latest changes in marketing with Google

Facebook Twitter LinkedIn
Back to blog

Did you notice the dramatic plunge in Google’s share price around the time of the announcement of their latest financial results? While most discussed the poor timing and leaked internal memo which precipitated the decline, for me it’s a reminder of the value in taking a deeper look at Google’s financial results to understand changes in their services and how their customers are spending their money at Google.

Looking beyond the main headline about the fall in share price, here is what I took from the announcement which I think is relevant to marketers:

  1. Google is still growing ad revenues. Yes, revenues may have been below expectations, but Google reported consolidated revenues of $14.10 billion for the quarter ended September 30, 2012, an increase of 45% compared to the third quarter of 2011. I think Facebook is going to struggle to compete with this in future.
  2. Google is reliant on major markets and international markets aren’t growing proportionally. With Google revenues from outside of the United States totalled $6.11 billion or 53% of total Google revenues, Google is still heavily dependent on the US and the international figure has actually declined slightly suggesting that Google is struggling to exploit international markets. Interestingly for those of us based in the UK, Google revenues from the United Kingdom totalled $1.22 billion, representing 11% of Google revenues!
  3. Google’s display network (GDN) is a significant source of revenue. When I’m training I find many marketers aren’t aware of this, or at least how large it is by volume of spend. Of course, it is switched on by default for new campaigns, so it’s worth being aware that it needs careful management to get ROI. In Q3 2012 Google’s partner sites generated revenues of $3.13 billion, or 27% of total Google revenues, in the third quarter of 2012. This is a 21% increase from third quarter 2011 Google network revenues of $2.60 billion. This shows that Google is being successful in growing its placements on publishers and generating more revenue as a result. It’s a reminder to look at how effective your spend is on the Google Display Network again, if you need one!
  4. Google’s traffic acquisition costs are significant. Google’s reports break out “TAC” – Traffic acquisition costs, the portion of revenues shared with Google’s partners, i.e. publishers who provide inventory on the Google Display network increased to $2.77 billion in the third quarter of 2012, compared to $2.21 billion in the third quarter of 2011. TAC as a percentage of advertising revenues was 26% in the third quarter of 2012, compared to 24% in the third quarter of 2011.
  5. Is the increase use of the mobile web harming Google?. With 67% of income from Google’s core search sites only increasing by 15% increase over third quarter 2011 coupled with an increase in use of mobile search, we can speculate that the switch to consumer’s use of mobile search may mean that Google is finding it more difficult to monetise mobile platforms. This will partly be because some advertisers may not be aware of it as an option so there is less competition and a lower CPC to Google. This is a timely reminder to review your investment and management of mobile search marketing and AdWords in particular.

Other sources of insights about the latest Google developments

Of course, there is only a limited amount of insight in the official figures from Google Investor Relations and there a host of other official channels it’s worth keeping tabs on. You’re probably following many of these, but if not, these are the five I would focus on:

  1. Google Webmaster Central - the best source for information on changes to the algorithm.
  2. Inside Search - more end-user focused, but often used for major announcements on the algorithm.
  3. Google Analytics blog - this service changes frequently, so it’s useful to follow all the changes if you’re a specialist in Analytics. If you’re not, I recommend subscribing to the monthly Google Analytics enewsletter available from the Google Analytics admin page.
  4. Google mobile blog - the least obvious of these, this blog covers new mobile apps for iPhone and Android as you’d expect, but also gives advice on mobile SEO, pay-per-click and display.
  5. Official Google blog - despite the official moniker, arguably the least useful of these since it mainly covers new applications and case studies rather than being a reliable source of new announcements.

Talk To Us About Accelerating your Digital Performance