Home Online Advertising Alphabet Earnings Earn A Shrug From Investors, But Nobody Else Can Keep Up

Alphabet Earnings Earn A Shrug From Investors, But Nobody Else Can Keep Up

SHARE:
Privacy Theater

Alphabet is so big that, even when it’s growing slowly, it’s still outpacing competitors.

On Tuesday, the company reported earnings for Q2 2024, which Wall Street considered a dud. Shares were slightly down by Wednesday morning, and YouTube in particular disappointed with a lower-than-expected growth rate.

But it can be deceiving to look at Google’s growth rates, which range from high single-digit percentages to low double digits – plus a continued decline in the third-party ad network business. Those mundane growth rates camouflage the degree to which the company is outgrowing the market.

Here for YouTube

There’s no better example of growth rate evaluation for Google muddying the picture than YouTube.

Investors were surprised and somewhat alarmed to see YouTube’s growth rate dip below search advertising’s growth. It’s a worrying sign for YouTube’s growth to be lower, when it makes $8 billion compared to search’s $43 billion.

During the Q&A portion of the earnings call, one investor asked whether YouTube was lagging with direct response or shopping ads, and was losing that performance edge, even while it earned more branding dollars from traditional TV.

But YouTube is still blowing every similar business out of the water. YouTube’s ad revenue grew by a mere billion dollars in Q2 2024 compared to the same period last year. It now totals $8.6 billion.

Disney+ isn’t yet a billion-dollar annual ad business – let alone adding more than $1 billion on top – and Disney’s core TV advertising revenue totaled $2.2 billion in Q1, which was actually down by a couple hundred million dollars from 2023.

Netflix is on the cusp of having a billion-dollar ad business in 2024. But it’s on a tough upward slog for growth and is, frankly, a one-trick pony compared to YouTube’s mix of formats and content.

Alphabet Chief Business Officer Philipp Schindler underscored for investors two main differentiators and growth engines for Google. First, of course, was how AI is being incorporated into ad products. But second, he highlighted “YouTube’s position as the leading multi-format platform.”

Subscribe

AdExchanger Daily

Get our editors’ roundup delivered to your inbox every weekday.

It’s a fair point: YouTube has long-form video and quick little Shorts clips, ad-free subscriptions, the YouTube TV package, the standalone YouTube TV app, even podcasting.

If there’s a way to play video – and sometimes even if not – YouTube has found its way in and is out-monetizing the competition.

Ummm … the news?

That being said, YouTube’s multi-format dominance isn’t exactly news, and it’s certainly not the big story at Google right now.

Perhaps you’ve heard: Google dropped a bombshell this week with the announcement that it will no longer force a phaseout of third-party cookies in Chrome.

That was world-shaking news in online advertising on Monday, but it hardly came up during Tuesday’s earnings report. Third-party cookies weren’t mentioned in the opening remarks, and only Michael Nathanson of the equity research and investment firm MoffettNathanson asked for more detail on Chrome’s change of approach.

“There was the whole focus around Privacy Sandbox, and we remain committed on the journey,” Sundar Pichai responded. “But on third-party cookies, given the implications across the ecosystems and feedback across so many stakeholders, we now believe user choice is the best path forward there.”

Must Read

DOJ v. Google: During Opening Arguments, The DOJ And Google Battle Over An AdX Divestiture

Court is back in session. And the fate of  the open internet is in the balance.

Chris Mufarrige, director, Bureau of Consumer Protection, FTC

FTC Consumer Protection Chief: No Easy Answers On Privacy, ‘Only Trade-Offs’

Privacy isn’t black-and-white, says the FTC’s Chris Mufarrige, promising evidence-driven consumer protection cases under the Trump administration.

How Encryption Keys Could Resolve The TID Furor

Rather than sharing universal TIDs that any DSP or curator can access, Raptive says publishers should instead share encrypted TIDs with an encryption key provided only to trusted demand-side partners.

Privacy! Commerce! Connected TV! Read all about it. Subscribe to AdExchanger Newsletters

Clear Channel Brings Mid-Flight Measurement To Its OOH Network

Clear Channel will provide advertisers weekly, mid-flight reports on outcomes driven by its inventory in order to bring OOH measurement closer to the speed of digital.

FTC Commissioner Mark Meador speaking at the NAD's annual conference in Washington, DC on Sept. 16, 2025. (Photo: Brian O'Doherty)

FTC Commissioner Mark Meador: ‘No Human Society Can Long Survive Without Consumer Trust’

Keeping American kids safe in what FTC Commissioner Mark Meador calls “an increasingly complex and fast-paced technological environment” is a top priority for the agency.

Comic: "Deal ID, please."

Amazon Expands Its Programmatic Integration With SiriusXM

On Tuesday, Amazon DSP announced an expanded integration with satellite radio company SiriusXM.