Google Profit, Lower CPC, Driven By Mobile Wrapped In Machine Learning, AI

Alphabet, Google's parent company, served up a little surprise for advertisers Thursday when it released earnings. The company managed to lower the cost per click for online search advertising, yet eke out a profit — something analysts worried about since Google began pushing advertisers toward the mobile Web and apps.

Google finally sees scale in mobile. In fact, mobile became the primary growth driver for Alphabet's financial success — $2.1 billion in revenue, up 21% year-over-year — during the second quarter of 2016. Ruth Porat, Alphabet CFO, during the earnings call said the company also "benefited from solid growth in desktop and tablet search, as well as continued strength in YouTube and programmatic advertising."

Technology makes it easier to identify intent signals through mobile search, video and programmatic that drive advancements to support speed and agility on the mobile Web through programs like Accelerated Mobile Pages. Google estimates that it now indexes more than over 150 million AMP pages, with more than 4 million new ones published every week from nearly 200 countries. 



"Mobile used to be the Wild West of the digital marketing frontier — many were afraid of it, no one knew the rules and there was an anything goes mentality," said Will Margiloff, IgnitionOne CEO, in an email to SearchBlog. "Google has essentially been the sheriff in town, taming it and improving it as marketers become more sophisticated in their mobile strategy and continue to see growth."

Another worry for analysts at one time was the growth of YouTube and how Google would monetize traffic and videos.

Take a trip down memory lane with me. While back in 2006 Pixsy CEO (at the time) Chase Norlin called the deal "one of the silliest maneuvers" he'd ever seen, James Belcher, senior analyst at eMarketer (at the time), called the deal "a nice switch from many deals done during the dot-com era, where the goal was to build traffic."

But the goal was to build traffic and then monetize it. "YouTube revenue continues to grow at a very significant rate, driven primarily by video advertising across TrueView and increasingly Google Preferred, with a growing contribution from buying on DoubleClick Bid Manager," according to Porat.

YouTube hosts more than 1,000 content creators crossing the 1,000 subscribers mark each day, and the company had paid out more than $2 billion to partners who use the advertising platform.

In a nutshell, it's really about mobile search growth, which should make some marketers darn happy.

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