5 takeaways from Google’s Q4 2018 earnings for search marketers

Google ad revenue increased to $39.1 billion in the fourth quarter of 2018, up 22 percent over the same period in 2017. That includes $27 billion from Google Sites (an increase of 22 percent) and $5.6 billion from Network revenues (up 31 percent), the company reported Monday.

On the earnings call, executives discussed several features, updates and programs relevant to search marketing and pointed to areas of focus for the company in the coming year.

AI-powered Search features. In discussing the permeation of AI into everything the company is working on, Pichai mentioned activity cards in Google Search that let you pick up where you left off on a previous search. Porat, in response to an analyst’s question said, “We are also investing to enable more visual ways of finding information, such as photos and videos.” Google Lens, for example, can now identify more than one billion products and pull up related items and details like product reviews.

Shopping. When it comes to product search and shopping ads, Google is facing significant competition from Amazon, which continues to see its ad business grow rapidly.

Google does not report on Shopping campaign performance specifically, but Pichai mentioned “the number of shopping daily active users on Google.com during the holidays doubled compared to last year.”

An analyst asked about the status of its cost-per-sale Google Shopping Actions program given that Walmart recently dropped out. Pichai said the company has “definitely seen strong traction there” with a “roughly seven-fold increase in merchants” since launch, including the addition of BestBuy, Nike and Sephora last quarter. He added that “Walmart is one of our deepest partners and they remain a strategy partner across multiple businesses for us … and we have efforts underway to work closer together with shopping.”

Pichai said there will continue to be more focus on shopping in 2019. “We see users come to Google a lot around key shopping moments and we want to make sure we invest in the experience to get closer to what they want,” he said.

Smart Campaigns. There are now more than 20,000 small businesses using Smart Campaigns, the automated campaign format that launched last year, Pichai said.

These campaigns work with Google My Business. Like Universal App Campaigns, everything from ad creation, audience targeting, ad delivery across Google channels — and soon landing page creation — is automated based on the advertiser’s stated goals, such as phone calls, website visits and requests for directions.

Google Home Hub holiday activations. One out of seven Google Home devices activated during the holiday season was a Google Home Hub, said Pichai. Home Hub features a screen, which means the implications for search marketers start to look a lot more equivalent to other screen devices than other Home devices. We’ve written about the Home Hub from an SEO and a local search perspective. The scale of these devices isn’t there yet, but it’s an area to keep an eye on.

Click volume keeps climbing as CPCs decline. Paid clicks on Google Sites, which include Google.com, YouTube, Gmail and other Google-owned and operated properties, shot up 66 percent compared to the fourth quarter of 2017, while cost-per-click (CPC) continued its decline, falling 29 percent compared to a year ago. In past calls, Google executives have pointed to YouTube as a leading contributor to lower CPC averages. These metrics weren’t discussed on Monday’s call, but YouTube TV and developments in performance advertising on YouTube came up several times. See our coverage of what was said about YouTube on Marketing Land.

About The Author

Ginny Marvin

Ginny Marvin is Third Door Media's Editor-in-Chief, managing day-to-day editorial operations across all of our publications. Ginny writes about paid online marketing topics including paid search, paid social, display and retargeting for Search Engine Land, Marketing Land and MarTech Today. With more than 15 years of marketing experience, she has held both in-house and agency management positions. She can be found on Twitter as @ginnymarvin.