Google also fares better as more business moves to its owned-and-operated media assets relative to its network members.
Revenue for Google properties increased $4.6 billion from Q3 last year. The combined earnings of publishers in its ad network grew by $369 million. Google’s own channels also have stronger ad rates, with the cost per click actually going up, compared to networks, which sell based on ad impressions and have seen those impression rates plateau.
Google’s traffic acquisition costs (TAC), which is the margin of search budgets it pays to distribution platforms – such as for queries sent through Mozilla’s or Safari’s default Google search – are high for network traffic but disappear for a channel like YouTube.
Google’s total TAC as a percent of ad revenue ticked down from 23% to 22% in the past year. Porat described it as a “favorable network mix shift from network to owned sites.”
In other words, Google is channeling users more effectively between its own properties and relying less on publishers and other audience gatekeepers.