We look at six Google stories that broke in Q3 and what they mean for marketers.

1. Alphabet

On 10 August Google announced the creation of a new holding company, Alphabet, as well as a new operating restructure. The change has been designed to help the search engine giant better manage its many companies at scale.

Commenting at the time, Google co-founder, Larry Page said: “Sergey [Brin] and I are seriously in the business of starting new things. Alphabet will also include our X lab, which incubates new efforts like Wing, our drone delivery effort. We are also stoked about growing our investment arms, Ventures and Capital, as part of this new structure.”

It was also announced that Google’s financials would now be provided separately.

What it means

Most of Google’s services will remain under the Google brand. This change will make it more clear where the companies profits are being made, and make it more clear when investments in ventures and capital hit profits. This transparency is good news for investors, advertisers, and customers. It may also allow more money to be in invested in new ventures and drive further innovations.

2. Q3 Earnings Call - 22nd Oct 2015

Wall Street welcomed the news that net income was up $3.98 billion $2.74 billion Q3 2014, with Alphabet shares up 11% after the call. An announced $5.1 billion shares buyback was also good news for investors.

Growth was driven by mobile search and YouTube.

  • Revenues of $18.7 billion and 13% year on year growth 
  • Substantial growth of mobile search revenue.
  • $5.1 billion Stock Buyback

What it means

Google has been pushing for mobile growth for a number of years and that is now starting to pay off. It’s likely that it will keep pushing mobile, making it a much bigger focus in 2016. It’s recent ‘mobile-friendly’ SEO update clearly shows its intention to force the industry to adapt a mobile-first approach.

3. Advertising

Paid clicks increased around 23%; however, aggregate cost-per-clicks declined 11% year-on-year, consistent with Q2 results. Google has announced new tools to help advertisers this season including extended remarketing capabilities, product insights, assortment report, and universal app campaigns; all of which were received positively.

What it means

Mobile growth will help to alleviate any declining cost-per-click concerns. Google is giving advertisers and retailers and increasing number of tools to be able to identify and reach consumers. However, advertisers and agencies are having to adapt much faster, keep up to date with new opportunities, and expand their expertise.

4. Cloud Storage

With Amazon Web Services driving $2.1 billion in revenue for Amazon in Q3 up 78% year-on-year it comes as no surprise that Google CEO Sundar Pichai called its cloud business an “exciting opportunity” and something which Google has “tremendous experience” in running, and “investing a lot, and playing for the long-term”.

What it means

Competition between Amazon and Google will drive down the cost of cloud based storage and services, which is good news for large and small businesses.

5. YouTube Red

On 2 October, YouTube unveiled Red - it’s $9.99 /month subscription service. This gives subscribers access to ad-free videos and the ability to watch videos offline on supported devices. They will also soon launch a music app which is likely to rival Spotify and Apple/ Beats Music Apps.

What it means

This is potentially game changing for the industry. YouTube, until now, has been entirely free to watch. If widely adopted, an ad-free service would lower the amount of opportunities to advertise on YouTube, driving up costs, and potentially meaning small advertisers would no longer be able to afford to advertise on the network.

YouTube and Adwords will undoubtedly, however, have a plan to be able to continue to offer opportunities for smaller advertisers. If subscription based models such as Netflix, Spotify, and now YouTube Red, are to become a normal revenue model, advertising models will also have to change and adapt.

6. Android Marshmallow & Nexus 6P

Google has started rolling out Android 6.0 Marshmallow, with a focus on security and privacy to rival Apple iOS, featuring support for fingerprint scanners and full-disk encryption. It also introduces improvements in battery management with ‘doze’, ‘app standbye’, and USB Type C support. The biggest addition is the Now On Tap feature which searches inside apps automatically when you hold down the home button, cards are presented full of information and actions.

The Nexus 6P mobile is now available in the UK (£439.99 - Carphone Warehouse 26/10/2015), with 5.7-inch display, all-metal unibody, 12.3 megapixel sensor, USB-C for fast charging, and fingerprint sensor. Snapdragon 81 processor, 3gigs of RAM, and 32-128 gigs of storage.

What it means

With the release of Android Marshmallow and the Nexus 6P, it’s clearly Google’s intention to continue to match Apple’s iOS, and iPhone offerings. This is always great news for competition and with fast fingerprint and encryption technology becoming a standard feature, it’s clear that privacy and security should remain a strong focus for any digital or technology company.

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