Alphabet delivers 22.3% growth in ad revenue

While YouTube ads under-performed, the company has high hopes for its growing TikTok competitor.

Even though some of its segments fell behind analyst expectations, Alphabet still delivered 23% revenue growth year-over-year along with high expectations for its short-form video offering.

Revenue from YouTube ads grew by 14.4% year-over-year to $6.87 biliion USD, which missed analyst expectations of $7.4 billion USD. Revenue from Google’s Ad Network, however, was up by an impressive 20.2%, driven by AdSense and AdMob products. Combined with 24.3% growth in Search and other ads, total ad revenue was up by 22.3% for the quarter.

CFO Ruth Porat said the YouTube results were “modest,” but largely due to comparison to a strong quarter to previous year. Growth came from brand and direct response ads. Philipp Schindler, SVP and chief business officer, said there were positive signs both in terms of short-term video (TikTok competitor YouTube Shorts is now averaging 40 billion daily views) and long-form viewing (YouTube accounts for over half of ad-supported watch time on connected TVs, something the company plans to capitalize on with new features in the year ahead).

Schindler added that is company has had positive feedback from advertisers how have utilized Shorts thus far, and it is “encouraged” by early tests with formats like app install and video action campaigns.

The company attributed the growth in search ads to ongoing strength in retail as well as recovery in travel. Looking ahead, Porat said the company is planning to make “considered investments” across both people and technical infrastructure to ensure “long-term value creation” across its advertising and Cloud business.

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