Google ad revenue surges 18% despite YouTube boycott

Google ad revenue surges 18% despite YouTube boycott

Google's advertising revenue leapt 18% to $21.4bn (£16.6bn) in the first three months of the year despite the ongoing YouTube advertising boycott.

Google's strong performance boosted parent company Alphabet's overall revenues up 22% to $24.7bn in the first quarter of the year.

Alphabet's operating income rose 24% to $6.5bn while Google's operating income grew 23% to $7.6bn. 

Overall, Alphabet's net income grew 28% to $5.4bn.

"We clearly continue to benefit from our ongoing investments in product innovation and have great momentum in our new businesses across Alphabet," Ruth Porat, chief financial officer of Alphabet, said. 

The results reportedly beat Wall Street's forecasts leading to a surge in Alphabet's share price which closed at more than $46 a share. 

Google achieved this despite the ongoing advertiser boycott of ads on YouTube following a report in The Times which accused ads on YouTube of funding terror.  

Google's results are in line with the recent WFA and Ebiquity's recent report on digital advertising which found most of the world's advertisers plan to increase digital ad spending it the coming year, especially in online video where 89% plan to increase spending.

This is despite the advertisers citing key concerns of viewability (90% of respondents see this as a ‘major concern’) and lack of transparency (76%).

Google has been striving to make amends and has been in conversations with brands and agencies. It has also introduced third-party brand safety reporting measures and blocked ads on YouTube channels with less than ten thousand views. 

The first quarter results do not break out revenue gained from Alphabet's hardware bets such as Google Home devices.

Under 'other revenues' however, which also includes Google's cloud-based services, Google reported revenues of $3bn, up 50% from the same period last year. 

Pivotal Research Group senior analyst Brian Wieser commented that Alphabet's strong performance provides confidence that the company can continue to grow while protecting its margins in the near term. In the long-term however, it will likely have to accept trade-offs between revenue growth, margin improvement and capital expenditures in order to diversify and include new revenue streams while investing to protect its existing ones, he added.

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