Alphabet, parent company of Google, released its earnings report yesterday for its fourth quarter. In it, we learned Google search advertising revenue increased 35% compared to the same quarter in 2020.
Overall, Alphabet reported Q4 revenue of $75.3 billion, up 32% from $52.8 billion vs. Q4 2020. For fiscal year 2021, Alphabet revenue was $257.6 billion, an impressive 41% increase from $182.5 billion in FY 2020.
Total Google advertising up 32.5%. In Q4, total Google advertising brought in $61.2 billion in revenue. In Q4 2020, that figure was $46.2 billion. “Total Google advertising” includes Google search and other, YouTube advertising, and Google Network.
Philipp Schindler, Google’s SVP and chief business officer, said on the Alphabet earnings call that this growth was driven by “broad-based strength in advertiser spend and strong consumer online activity. In the fourth quarter, retail was again by far the largest contributor to year-on-year growth of our ads business. Finance, media and entertainment and travel were also strong contributors.”
And in fiscal year 2021, total Google advertising grew 42.5% year over year compared to 2020 – $209.5 billion vs. $146.9 billion.
Wondering what percent of Alphabet’s total revenue came from Google advertising in 2021? That would be 82%.
Google Search & other up 35.7%. In Q4, search advertising accounted for $43.3 billion in revenue, Alphabet reported. In Q4 2020, that number was $31.9 billion.
Looking at fiscal year 2021, Google search and other brought in just under $149 billion, an increase of 43% over $104 billion in 2020.
YouTube Advertising up 25.3%. In Q4, YouTube advertising accounted for $8.6 billion in revenue. In Q4 2020, that number was $6.8 billion.
For fiscal year 2021, YouTube advertising brought in $28.8 billion, an increase of 45.8% over $19.7 billion in 2020.
Google Network up 25.5%. In Q4, the Google network accounted for $9.3 billion in revenue. In Q4 2020, that number was $7.4 billion
For fiscal year 2021, Google network brought in $31.7 billion in revenue, up 37.2% versus $23 billion in 2020.
Why we care. Last week, Microsoft reported its search revenue, a much smaller $3 billion by comparison during the same time period. Clearly, Google is the behemoth in search advertising. This provides even more proof that brands and businesses are investing in paid search advertising on Google. During the earnings call, Google highlighted advances in AI, machine learning, and automation as ways they are helping advertisers find opportunities. The big question: is Google delivering enough conversions and the best ROI? Schindler noted that “there’s a lot of intelligence in our auction to deliver great ROI for advertisers, but there’s always more we can do.”
Source: Alphabet Fourth Quarter and Fiscal Year 2021 results
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