Google, one of the most successful digital advertisement companies in the world, is showing signs that it is not as invincible as it was before. Its once unmatchable power in search is now starting to face competition, mainly thanks to Microsoft who is aiming to become the new king of search with its ChatGPT integration in Bing. YouTube, another division of Alphabet (Google’s parent company), has also recently suffered declines in advertisement revenue, which is due to the popularity of TikTok, as well as Apple’s new App Tracking Transparency feature which may cost YouTube up to $2.2 billion in revenue in 2022.
Google is also missing out on a big piece of the advertising pie when it comes to retail media. It has ad tools for selling and buying ads on e-commerce sites, but these are not nearly as successful as Amazon and Walmart’s ad businesses, which make up for 80% of all retail ad spend. Companies like Microsoft and Meta are starting to take Google’s place and are taking the initiative in coming up with new ad products, as well as having closer relationships to retailers.
On top of all these issues, financial analysts predict that Google’s days of double-digit sales growth are now behind them. Matthew Bailey, principal analyst at research firm Omdia estimates Google’s digital ad revenue growth at 5% this year and only slightly higher next year when some macroeconomic pressures are expected to ease. Not the most comforting outlook considering Google’s long-standing dominance in the digital advertising world.
Though it is no longer dominating the industry with its double-digit growth rates, Google is taking action to try and maintain its position. It has created its own AI chatbot called Bard, and is doing its best to stay ahead of its competitors by actively staying ahead of the curve.
Google is one of the largest technology companies in the world, but it started off as a small startup back in 1998. With the help of its co-founders, Larry Page and Sergey Brin, Google quickly gained prominence. Over the years, it has become synonymous with search and transformed the landscape of the tech industry. Throughout its rise to the top, Google has continually adapted to change, and with its current facing several challenges to its advertising business, it will start to test just how effective its adaptability is.
