Google ad revenue surges 18% despite YouTube boycott

Google showed no signs of slowing down despite an advertiser boycott of YouTube in the first quarter.

Google ad revenue surges 18% despite YouTube boycott

Google's advertising revenue leapt 18% to $21.4 billion in the first three months of the year despite the YouTube advertising boycott.

Google's strong performance boosted parent company Alphabet's overall revenues 22% to $24.7 billion in the first quarter of the year.

Alphabet's operating income rose 24% to $6.5 billion while Google's operating income grew 23% to $7.6 billion. 

Overall, Alphabet's net income grew 28% to $5.4 billion.

"We clearly continue to benefit from our ongoing investments in product innovation and have great momentum in our new businesses across Alphabet," said Ruth Porat, CFO of Alphabet. 

The results reportedly beat Wall Street forecasts leading to a surge in Alphabet's share price, which closed at more than $46. 

Google achieved this despite the advertiser boycott of YouTube following a report in The Times of London that accused ads on YouTube of funding terror.  

Google's results are in line with the recent WFA and Ebiquity report on digital advertising that found most of the world's advertisers plan to increase digital ad spending it the coming year, especially in online video, where 89% plan to increase spending.

This is despite advertisers citing key concerns of viewability (90% of respondents see this as a "major concern") and lack of transparency (76%).

Google has been striving to make amends and has been in conversations with brands and agencies. It has also introduced third-party brand-safety reporting measures and blocked ads on YouTube channels with less than 10,000 views. 

The first-quarter results do not break out revenue gained from Alphabet's hardware bets such as Google Home devices.

Under "other revenues," which also include Google's cloud-based services, Google reported revenues of $3 billion, up 50% from the same period of last year. 

Pivotal Research Group senior analyst Brian Wieser commented that Alphabet's strong performance provides confidence that the company can continue to grow while protecting its margins in the near term. In the long-term, however, it will likely have to accept trade-offs between revenue growth, margin improvement, and capital expenditures to diversify and include new revenue streams while investing to protect its existing ones, he added.

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