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Google Feels Earnings Impact From Russian War on Ukraine

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Google Feels Earnings Impact From Russian War on Ukraine

Alphabet’s 2022 Q1 earnings call revealed that Russia’s attack and war on Ukraine is having an effect on revenues and that this effect should continue into the second quarter.

Some of the negative impact on Google/Alphabet’s earnings is due to the fact that Alphabet has suspended most commercial activity in Russia.

But the other source of negative impact is due to advertiser pullback in Europe, most notably in advertising spending on the YouTube platform.

Google Pause on Commercial Activity in Russia

Google announced on March 3, 2022 that they were suspending ad sales in Russia, as reported in Reuters.

A Google spokesperson issued this statement at the time:

“In light of the extraordinary circumstances, we’re pausing Google ads in Russia…”

That move was followed one week later by a suspension of payment-based services, including subscriptions, in Russia on March 10, 2022.

The suspension of Russian advertising was also expanded so that Google was now blocking Russian-based companies from advertising outside of Russia, effectively isolating Russian businesses from doing any kind of advertising-based business whether inside or outside of Russia.

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Google published a blog post on March 10th stating:

“Following our announcement last week that we paused Google ads in Russia, we’ve now paused the vast majority of our commercial activities in Russia – including ads on our properties and networks globally for all Russian-based advertisers, new Cloud sign ups, the payments functionality for most of our services, and monetization features for YouTube viewers in Russia.

We can confirm that our free services such as Search, Gmail and YouTube are still operating in Russia.

We will continue to closely monitor developments.”

Brian Nowak, a Morgan Stanley Analyst, asked:

“…Ruth, wondering, could you talk to us at all about sort of the shape of the ad business growth throughout the first quarter, understanding there’s some uncertainty around Ukraine, etc.?”

Ruth Porat, the Alphabet Chief Financial Officer answered:

“…the second quarter results are going to continue to reflect that we suspended the vast majority of our commercial activities in Russia.

And then I noted the impact of foreign exchange. So as we’re looking at it generally, we feel good about what we’re doing in the business, a couple of key points that I called out there.”

Suspension of Russian Commercial Activity and European Advertising Pullback

Next, Eric Sheridan, a Goldman Sachs Analyst, asked a follow-up question about weakness in brand advertising and if there was any correlation between the Russian war on Ukraine and advertising weakness in some parts of the world.

Sheridan asked:

“Thanks so much for taking the question. Maybe one follow-up to Brian’s question.

Other industry players have called out pockets of weakness in brand advertising globally in the quarter that you just reported.

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Did you see any of that from a volatility standpoint, especially around maybe the war in Ukraine for a period of time in March?”

Alphabet Chief Financial Officer, Ruth Porat, answered:

“In terms of revenues, the most direct impact is the fact that we suspended the vast majority of our commercial activities in Russia, as we announced in early March.

And to your question, about 1% of Google revenues were from Russia in 2021, and that was primarily from advertising.

In addition, from the outset of the war, there was a pullback in advertiser spend, particularly on YouTube in Europe.”

European Versus Asian Region Earnings

In the following question the analyst uses acronyms for global regions.

The acronyms and their meanings are:

  • EMEA = Europe, the Middle East and Africa
  • APAC = Asia-Pacific

Michael Nathanson, MoffettNathanson Analyst asked:

“And then to Ruth, it’s an odd quarter because if you look at APAC, the APAC region underperformed EMEA, which had Russia and Ukraine in there.

Is there anything you want to call out about Asia Pacific this quarter, why it could have been softer? Or any other product that may have led to a bit of a slower quarter for APAC?”

Ruth Porat answered:

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“…In Europe, as you noted in your question, the slightly bigger impact from the war in Ukraine than in other regions, and then the sizable delta between fixed and floating really reflects the meaningful strengthening of the dollar versus the euro.

I guess to the heart of your question with respect to APAC, the main thing there is to take you back to a year ago, we were lapping a substantial 39% growth rate in constant currency.

And so this really reflects lapping that sizable growth relative to more muted ads performance in APAC this first quarter, and it really takes you just back to last quarter.”

Impact of Ukraine War Felt at Alphabet

The CFO of Alphabet noted that one percent of revenues were advertising related from Russia and that this revenue was directly impacted from Alphabet’s decision to pull out the majority of commercial activity from Russia. That is potentially a fairly significant amount of revenue, so it’s clear that the Russian war on Ukraine is having a direct impact on Alphabet.

An indirect impact is from a pullback in advertising in Europe, primarily focused on YouTube advertising spend in Europe.

Citation

Read a Transcript of the Alphabet Q1 2022 Earnings Call Question and Answer Session

Watch the Entire Alphabet Q1 Earnings Call

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LinkedIn Lists This Year’s Top 25 Marketing & Advertising Companies

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LinkedIn Lists This Year's Top 25 Marketing & Advertising Companies

LinkedIn lists the top 25 companies in the marketing and advertising industry in a new report that could be a valuable resource for job seekers.

The report aims to highlight the ‘best workplaces to grow a career’ in 2022.

Companies are chosen based on a methodology that looks at LinkedIn data across seven pillars:

  • Ability to advance
  • Skills growth
  • Company stability
  • External opportunity
  • Company affinity
  • Gender diversity
  • Educational background

LinkedIn’s data illustrates the demand for professionals with experience in search engine optimization. Within the top 10, there are three companies where the most notable skills are related to SEO.

In this article I’ll highlight the most relevant data for search marketers, followed by a skimmable list of all the top 25 companies.

Top Companies For People With SEO Skills

LinkedIn’s list of top 25 companies in marketing and advertising includes three that are top employers for SEO-related jobs.

At number two on the list, the most notable skills of workers at Merkle include web analytics, Google Data Studio, and PPC advertising.

Power Digital Marketing, at number six on the list, hires a notable number of search engine optimization specialists.

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SEO, Google Analytics, and social media marketing are the most notable skills among employees at Publicis Health, which is number 10 on the list. Search Engine Marketing Analyst is also the most common job title.

As LinkedIn’s report only includes companies with at least 500 employees, this list excludes smaller firms that may be considered top workplaces for SEOs.

LinkedIn’s Top 25 Companies In Marketing & Advertising

Below is the complete list of companies LinkedIn recognizes as the top workplaces in the marketing and advertising industry. It’s listed by company name followed by most common job titles.

  1. Havas Media Group: Media Planner, Media Supervisor, Investment Associate
  2. Merkle: Search Engine Marketing Analyst, Account Manager, Senior Analyst
  3. VMLY&R: Creative Director, Engagement Director, Account Manager
  4. Criteo: Account Strategist, Account Executive, Software Engineer
  5. Spark Foundry: Media Associate, Strategy Associate, Senior Analyst
  6. Power Digital: Marketing Strategist, Account Manager, Search Engine Optimization Specialist
  7. Quotient Technology: Customer Success Manager, Campaign Manager, Sales Director
  8. PHD: Strategy Supervisor, Media Strategist, Associate Media Director
  9. Digitas Art: Account Executive, Art Director, Producer
  10. Publicis Health: Search Engine Marketing Analyst, Account Manager, Pharmaceutical Sales Representative
  11. Area 23: Account Supervisor, Producer, Associate Creative Director
  12. RPA: Account Coordinator, Account Executive, Media Planner
  13. Intouch Solutions: Account Manager, Project Manager, Marketing Coordinator
  14. Digitas North America: Data Analyst, Account Manager, Art Director
  15. Horizon Media: Brand Strategist, Digital Media Planner, Strategy Supervisor
  16. Spectrum Reach: Account Executive, Account Planner, Local Sales Manager
  17. Ogilvy: Account Executive, Art Director, Copywriter
  18. Octagon: Account Executive, Event Specialist, Group Director
  19. McCann Workgroup: Account Executive, Art Director, Copywriter
  20. Starcom: Media Associate, Senior Analyst, Strategy Supervisor
  21. Saatchi & Saatchi: Account Executive, Art Director, Copywriter
  22. Walmart Connect: Partnerships Manager, Campaign Manager, Account Manager
  23. WPP: Researcher, Executive Assistant, Information Technology Operation Manager
  24. 360i: Media Manager, Account Manager, Art Director
  25. DDB: Account Executive, Art Director, Copywriter
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LinkedIn notes nearly all of the above companies are hiring. For more information, including links to available job openings, see the full blog post.


Featured Image: Tada Images/Shutterstock

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