Google grosses $46.2bn from ad revenue in 2020, set to benefit from investment in brand building in 2021
Google has disclosed that it grossed a whopping $46.2 billion from advertising revenue in 2020. It also noted that brands’ renewed quest to invest in brand building at the wake of the covid-19 would bring a spike in its ad revenue in 2021.
The technology giant revealed ad revenue surged from $37.9bn (£35bn) in 2019 to $46.2bn (£33.8bn) at the end of its fourth quarter of 2020. Google’s combined advertising business, with YouTube accounted for 81% of fourth quarter sales, up 23% year-on-year. The company reported a “significant acceleration of brand spending on YouTube”, the video streaming platform saw advertising revenues surge 46% to $6.9bn.
Speaking in an earnings call to mark Google-parent company Alphabet’s fourth quarter results, SVP and chief business officer Philipp Schindler, acknowledged there had been “substantial pullback at the outset of the pandemic” in brands spending on Google services but this began to recover in the third quarter.
In a related development, Google has observed the renewed efforts of brands to invest in brand building at the wake of Covid-19 stating that the trend portends a great benefit for Google. It noted that marketers are pumping more money into brand building advertising as brands recover from the early effects of the pandemic. According to Google, many brands sacrificed brand spend in wake of the pandemic last year, cutting budget and focusing on short-term tactical activity.
“Marketers realized that even if there was a pullback in consumer demand in the short-term, they needed to keep their brands in front of people to stay top of minds when spending picks back up”, adds Schindler.
Schindler’s assertion is in line with various global brands who are moving back towards brand building, a recent example being Chinese smartphone brand Huawei, which shifted the focus of its global marketing team to brand building to deal with the changes brought on by the pandemic.
Google highlighted L’Oréal as a shining example in adapting to the drastic change in consumer shopping behaviour. Schindler says the brand made a “sharp pivot to e-commerce” and YouTube tool True View which is skippable ads that marketers are not charged for if skipped.
“By making existing video creatives more timely and actionable, their Kiehl’s US brand drove record visits to their site from YouTube, four times more per dollar. They’re also partnering with us to bring AR experience for their cosmetics across Google Services, including YouTube and Search. I could go on and on. Companies are rapidly adopting.”Google noted.
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