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I’m wondering if growth is just synthetic at this point. They can just add more ads regardless of user growth. There has been a noticeable increase in ads acro

I’m wondering if growth is just synthetic at this point. They can just add more ads regardless of user growth. There has been a noticeable increase in ads across all their products.

qiskit 5y ago
Growth is primarily due to demand - by advertisers, not the users. Online ad spending increased during the pandemic and is expected to continue to grow throughout this decade. Advertisers flush with cash are looking to spend it online. And google, fb, etc are more than happy to oblige. Google is simply increasing the supply ( ads ) to meet the demand ( advertisers ). This sadly means we'll be seeing more and more ads online...
- riku_iki 5y ago
  > Growth is primarily due to demand - by advertisers, not the users. It is actually both, from q3 10k: Paid clicks change: 24% Cost-per-click change: 17%
- darkwizard42 5y ago
  Also, the margins are getting better, through more ad sales and less costs (price per ad in a super rudimentary way is higher) see riku comment for more
paulpauper 5y ago
They don't even need growth. Their earnings and profit margins are high enough that they can deliver billions of dollars of value every quarter to shareholders absent of growth.
summerlight 5y ago
This is one of significant misconception for digital marketing. More ads doesn't necessarily mean more revenue since it's bound by total advertising budget. Let's assume an optimal ads market and you put more ads there without further optimization or budget, then there will be less auction pressure per ads (thus less CPM) and roughly similar revenue. For something like 40% YoY growth at Google's scale, you need to convince big advertisers to allocate more budgets.