Speaking on the company’s fourth quarter earnings call, Google’s senior vice president and chief business officer Nikesh Arora said working with brand advertisers “has been a big priority for us and we’re making great strides”.
Brand partners have been impressed by YouTube – which delivers more than 1 billion viewers per month and saw a 50 per cent increase in daily watch time in the past year – particularly consumer packaged good companies, which drove growth in the last quarter, according to Arora.
Arora said: “Part of our ability to get consumer packaged goods companies to come and advertise with us is our ability to convince them that brands can be built on the internet and YouTube clearly is the key player in our brand story vis-a-vis advertisers, because they still think visually – they still think video when they think brand advertising, not just text ads.”
Marketers have also been increasingly using creative ad formats that pivot around user engagement such as TrueView or other engagement ads across the web, Arora said.
But most importantly, the growth in brand marketing with Google has been driven by improvements made to the measurement services it offers, Arora said. In the last quarter Google enabled advertisers on its display network to buy ads based on impressions – ads that people actually saw – and in November it began testing Nielsen Online Campaign Measurement on the network and YouTube, which allows marketers to see the demographics of the people they reached with their campaigns and compare that with other media.
Arora said: “This is just early table stakes which is a sort of comfort factor for advertisers, when they see that they can look at Nielsen OCR Metrics vis-a-vis us and other people and get a sense that they are not spending their money in an unwise fashion, but I think there’s tremendous amounts of evolution and development that’s going to happen in this space.”
In the long term, Arora believes that every piece of advertising will become digital.
“We’re still at low double digit numbers in terms of how much ad spend is digital versus non-digital. So we need more people in the digital space getting more and more advertising to shift from what we call traditional old media. I think over time television becomes digital, I think every piece of advertising becomes digital because this provides so much efficiency from a measurement perspective and a targeting perspective to take out a lot of waste out of the system,” he added.
Elsewhere, Google said growth in its performance advertising business was also driven by new measurement features as well as “more sophisticated marketers aligning their search and display advertising strategy”.
Arora said: “Last year we made the move to Enhanced Campaigns in AdWords. 12 months in, marketers tell us it helps them get results and reach people across screens in a big way. Our internal slogan for this is ‘Advertisers ROIs don’t lie.’ We also rolled out estimated total conversion. Marketers can now measure results like calls and conversions that take place in different devices.”
He cited 1-800-Flowers, which discovered a 7 per cent increase in overall conversions after realising purchase start on one device and end on the other.
Google’s revenues grew 17 per cent year on year to $16.9bn in the three months to 31 December. Profit rose 17 per cent to $3.38bn.
Paid clicks increased 31 per cent year on year and 13 per cent on the previous quarter, although the average cost per click decreased 14 per cent year on year and 2 per cent on the third quarter.