Marketecture: Get Smart. Fast.
00:25:40 · Ari Paparo, Chris Harihar
[00:25:40] S0: What's the most the most go to event on the calendar for executives? [00:25:46] S2: Oh, go to event in the space? I do think that the Marketecture events Oh, yeah. Very I'm biased here obviously. You always got to speak to your audience. No. No, but I do think that the Marketecture events like, know, have become really important for folks in our community and ad tech community where I I actually see less sponsorship, less attendance for, you know, some of the more legacy events in the space, which you guys, you know, watch out everybody. You guys are gonna... You're in the crosshairs now, but I do think that the Marketecture events have become more important [00:26:21] S0: for Love to hear it. And last question, what is the best social network for getting your message out? [00:26:26] S2: X is great. I also have a very popular TikTok account that's very focused on PR that... Very popular. This is a business stretch. [00:26:35] S0: That's a stretch. Yeah. [00:26:35] S2: Is it... Hey. My... A video I did on Neppo Babies, over 4,000,000 views. I'm [00:26:40] S0: just saying. Okay. That's not that's not nothing. I do think [00:26:44] S2: TikTok is underserved for b to b audiences. You could do a lot more there. [00:26:48] S0: Alright. You heard it here first. That was awesome. We're gonna take a quick break and come back. We have this Google earnings with a miss and a bunch of other interesting stuff around FreeWheel and Walmart and just so much news. So we'll be back in a second.
00:27:02 · Eric Franchi
[00:27:02] S1: Alright. We are back. Man, we could have gone forever with, Chris. This is stuff that I think we we missed. We we we wanted to get to. But we had a lot of news this week. Let's see how much we can get into it. Let's start with earnings buzz. Two of the biggest companies in the world, Alphabet and Microsoft, reported last night. So I'll talk about it. You guys can react. So Google, Google's down today, by the way. Like, something like nine, 10%, the stock to it was a pretty rough quarter. So search grew 12%, contact $63,350,000,000. Just ridiculous numbers. But that's down 17% last quarter. YouTube ads grew 9% to $112,200,000,000, down 13% and under the analyst estimate. And the only kind of like bright spot, I don't think it was mentioned was the network was up 1% versus being down 1% the the last quarter. So, so not great growth from Google relative to what we saw last week with Meta. And they said something that was kinda odd. The the... They, I think, intended this to be taken very positively, which is queries are growing the fastest rate in five years. AI mode has passed 1,000,000,000 monthly users. These queries run about three times longer than traditional search, which means usage is growing, but like monetization is not, which I guess the street is taking as a real signal. It could just be the stuff is too is too, early. And, you know, Schimmler said, like, AI careers have lower monetization. On the bright side, tons of talk about AI, more AI talk than ad talk. A 100% year over year growth in cloud, Gemini Assistant, a billion users, fastest growing product in Google history. So let's... That was a lot. Let's talk about Google before we get into Microsoft.
00:28:43 · Ari Paparo, Eric Franchi
[00:28:43] S0: Yeah. I I think the... A little bit of the chicken coming home to roost here where, you know, I think I wrote an article about these exact metrics, like, more than a year ago, maybe eighteen months ago. And and there's basically, like, users use AI, and therefore, they monetize less. They go to other places, and they click less. And if you multiply all those things out, it doesn't look like the search business is infinitely sustainable the way it used to be. And it feels like this is the first quarter where we're seeing a little bit of that. Now on the positive side, you could have made the exact same argument when the iPhone came out, and people did. I think there's an old blog post of mine on aripaparo.com where I do that. And everyone was like, okay. Smaller screen, less clicks. You know, users are gonna have apps. They're not gonna click as much, blah blah blah. And Google just ran through that like a freight train. So I'm not saying the long term outlook for this company is bad. It's the most successful company in the history of humanity until anthropic maybe. But this is a real challenge to the search business. [00:29:51] S1: Chris, what you got?
00:29:51 · Eric Franchi, Chris Harihar
[00:29:51] S1: Chris, what you got? [00:29:52] S2: Yeah. I I think it's... I would not bet against Google. I mean, at the end of the day, they... I think they're they're essentially subsidizing all... Like, they're they're they're figuring it out, I think, on the... How to monetize some of the AI features and functionality that they're rolling out. I mean, like, they will take the time to understand how to better roll out, like, ad experiences across that... Across some of those capabilities and features. It just feels like, you know, they're... It's early days on how they're gonna monetize that and at some point they're gonna flip several switches and they're gonna be making like trillions of dollars. Like, feel like we're... Any any like, pullback on Google to me seems very, like, much, like, short term thinking. I mean, like, this is... When you see an an... Anthropic like s one and you understand that Google has so much data, so much opportunity to actually be a bigger player in the AI space just given how entrenched they are, it just seems like they will at some point absolutely crush it in terms of monetization on AI.
00:30:57 · Ari Paparo, Chris Harihar
[00:30:57] S0: I'll make two other points. One is that there's no evidence from any other company that there's a slowdown in advertising. So the macro picture does not appear to be slowing down. Although the YouTube number is only growing 9% is concerning. And then the second point I'll make is that the growth in cloud is just astounding. And I think Google as a public company is a much more attractive company if they have two legs of a stool in the hundreds of billions of dollars a year in revenue as opposed to, like, Meta that's 99% advertising. [00:31:28] S2: For sure. The YouTube members are kind of interesting to me just given how... Like, I I will say YouTube is an ad heavy experience. Mhmm. They are rolling out features every single day for creators, for advertisers. It feels like they've jammed a lot in there. And and I do wonder what's going on in terms of in terms of that slowdown. But YouTube seems... YouTube is is absolutely massive. You see the pressure that it's putting on a business like Netflix. And I feel like they have... They're still possibly scratching the surface on how to make more money off of YouTube and we'll, you know, we'll see. I think more premium programming is... You know, like there's gonna be more investment on that front. We'll see. But YouTube, it's kind of interesting just given what the experience looks like today.
00:31:28 · Chris Harihar, Ari Paparo
[00:31:28] S2: For sure. The YouTube members are kind of interesting to me just given how... Like, I I will say YouTube is an ad heavy experience. Mhmm. They are rolling out features every single day for creators, for advertisers. It feels like they've jammed a lot in there. And and I do wonder what's going on in terms of in terms of that slowdown. But YouTube seems... YouTube is is absolutely massive. You see the pressure that it's putting on a business like Netflix. And I feel like they have... They're still possibly scratching the surface on how to make more money off of YouTube and we'll, you know, we'll see. I think more premium programming is... You know, like there's gonna be more investment on that front. We'll see. But YouTube, it's kind of interesting just given what the experience looks like today. [00:32:11] S0: And now we don't have in the notes, the show notes, the... What I think is really big news, which is that Instagram's going to be doing long form content and coming to your TV. You know, this is something we talked about in our annual predictions episode, Eric. We were thinking YouTube... I mean, Meta was gonna get into... I was thinking Meta was gonna get into CTV as a... As an ad network. We knew they were doing something, but I I think they have a very viable opportunity to displace some YouTube viewership, with long form content, you know, broadcast on a... In an app on a TV.