Alphabet Inc., the parent company of Google, announced its Q4 2022 revenue of $76.05 billion on Thursday, a 1% YoY increase but $440 million lower than analysts’ projections. The full-year 2022 revenue came in at $283 billion, a 10% increase from the previous year. Ruth Porat, Alphabet and Google’s CFO, stated that the company is taking steps to improve its cost structure and invest in high-growth areas for long-term growth.
Google advertising revenue for Q4 2022 was $59.04 billion, a decrease from $61.24 billion in the same quarter of the previous year. YouTube ads brought in $7.96 billion, while Google’s network generated $8.48 billion in Q4 2022. To recover, Alphabet cut 6% of its global workforce, or 12,000 jobs, in January.
According to Evelyn Mitchell, an Insider Intelligence Analyst, Google ended 2022 in a different place than the previous year, missing analyst expectations for the second quarter in a row with only 1% YoY growth. Total ad revenue declined for the second time in Google’s history, the first being in Q2 2020.
Insider Intelligence projects that Google will see a 7.2% increase in net digital ad revenue in 2023, bringing in $180.59 billion and a 28.8% share of the global digital ad market. Facebook follows with an 11.4% share. Worldwide search ad revenue is expected to reach $147.33 billion, representing 59.5% of the global search ad market.
Mitchell noted that YouTube’s decline was anticipated due to privacy changes and increased competition. However, even search revenue, which is performance-driven and typically less affected by ad spending downturns, decreased. This, according to Mitchell, does not bode well for the rest of the digital advertising industry.
Insider Intelligence projects that YouTube’s net ad revenue will grow 11.2% in 2023, reaching $17.00 billion globally and 9.4% of Google’s net ad revenue worldwide, based on 2.30 billion viewers worldwide, a 3.3% increase from 2022. This equates to 63.3% of digital video viewers worldwide.
