Google : Alphabet Inc advertising & marketing profile

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Google is the world's most powerful technology company, wholly dominating the connected environment, not just in search but also, via YouTube, in video sharing and, through Android, in mobile communications. Its main global challenger is probably Facebook, but for now Google remains comfortably ahead. The company has two missions in life: firstly to "organise the world's information and make it universally accessible" and more recently "to develop services that significantly improve the lives of as many people as possible". To that end it has built upon its core offering to spin out a kaleidoscope of additional services, ranging from global mapping and mobile software to what it calls "other bets" such as healthcare research, driverless cars and even balloon-powered internet in rural Africa. To support its diversification and perhaps also blur a little of the relentless focus on its core search business, it created new umbrella company Alphabet Inc in 2015. Yet it is Google which still generates all but a tiny proportion of corporate revenues. Uniquely, for now at least, virtually all its add-ons are free to use, paid for by the awe-inspiring success of the company's advertising programme. The search business rakes in more than 40% of all global digital advertising expenditure. Yet Google's position at the top of the digital advertising tree is under threat from Facebook (20% and rising of online adex) and even increasingly from Amazon. Google has attempted to broaden its reach by moving into hardware - primarily mobile handsets and Chromebook PCs - but results have been patchy. In 2011, it took steps to monetise Android by acquiring one of its first licensors, US handset manufacturer Motorola, but that experiment failed and the business was sold on two years to Lenovo of China. More recently it acquired a large chunk of contract manufacturer HTC, makers of its Nexus and Pixel handsets, to bring handset development inhouse again, but market share is tiny compared to Samsung and Apple. A big push into self-driving cars through "other bet" Waymo holds more promise, but it's still early days and this too is an increasingly crowded sector with many deep-pocketed companies jostling for a share of the market. Another small but interesting sideline is the Nest home automation business, acquired in 2017. But for now search advertising still dominates Alphabet's business model. Group revenues rose by almost a quarter in 2018 to $136.8bn - of which more than 85% was from search advertising - while net income more than doubled to a record $30.7bn. Founders Sergey Brin and Larry Page continue to hold majority control of the business; Page is CEO of Alphabet with Brin as president. The key Google devision is led by CEO Sundar Pichai.

Capsule checked 29th June 2019

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Historical profile information for Google

Recent stories from Adbrands Update:

Adbrands Daily Update 18th Nov 2019: The brain-drain of senior marketers from traditional clients to tech giants like Google and Apple continues apace. This week, Google added two more big names to its roster. Marie Gulin-Merle, until recently global CMO of Calvin Klein and chief digital officer of its parent company PVH, and previously CMO of L'Oreal USA, has joined Google as VP, global ads marketing. She will be responsible for managing Google's global media spend, as well as building and delivering a global marketing strategy for the company's ads business and its advertising products. Former T-Mobile USA marketing executive Nick Drake has also joined the search giant this month as VP global marketing.

Adbrands Daily Update 29th Oct 2019: In a further push into hardware, Google agreed to acquire Fitbit for $2.1bn. The deal will significantly bolster Google's own fledgling business in the wearables sector: Fitbit is the #2 brand in that market in the US; still some way behind Apple, but also well ahead of third-placed Samsung. It's a welcome lifeline for Fitbit, which has seen performance plunge following the aggressive moves by Apple and Samsung into their sector. It has reported profits only once in the last 11 quarters, and its recent attempt to go head-to-head with its bigger rivals in smartwatches has not been successful. Both companies' shares rose on the back of the announcement, though some observers were less positive. "The acquisition is another example of Google tilting at windmills," said analysts at Wedbush Securities. "Google is uniformly bad at consumer products in our view, and appears to us to be intent on spending whatever it takes to prove our view wrong."

Adbrands Daily Update 29th Oct 2019: Alphabet's revenues reached new highs in 3Q, up 20% against the prior year and topping $40bn for the first time at $40.5bn. As usual advertising revenues were the driving force at $33.9bn, while the contribution from "other bets" - its development projects like Waymo self-driving cars, Google Fiber internet connectivity and Verily healthcare - were negligible by comparison at $155m. However, costs rose even more sharply as the company took on new staff, and the group booked heavy losses on its venture capital investment portfolio, which has shares in companies like Uber, Airbnb, 23andMe, Duolingo. These contributed to a 23% fall in profit to $7.1bn.

Adbrands Daily Update 15th Oct 2019: According to research from eMarketer, Amazon is now the #2 in US search advertising behind Google, after overtaking Microsoft last year. The etail giant is also the fastest-growing in the sector, with revenues up 30% this year alone. "Amazon's ad business has attracted massive increases in spending because advertisers can reach consumers during product queries, a time when they're ready to buy," said eMarketer principal analyst Nicole Perrin. "Amazon has also rolled out better measurement and targeting tools, making it even more attractive for advertisers." Google still accounts for over 73% of US search advertising - equivalent to around $40.3bn this year - but Amazon is #2, albeit some way behind at almost 13%, or $7.1bn. Microsoft has around 6.5% of the market.

Adbrands Daily Update 24th Sep 2019: Google ramped up its offering in the streaming gaming market with the launch of a new subscription-based mobile service, Play Pass. This began rolling out to US Android devices this week at a price of $4.99 per month, and will become available in other markets over the coming weeks. Google's previously announced higher-spec service Stadia, which is designed to compete with home consoles and will cost $10 pm, is set to debut in November. However, Play Pass is at least in part a response to an immediate challenge from Apple's Arcade mobile gaming service, which was introduced last week.

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