Google says companies are investing money back into brand building on its platforms as they look to “keep their brands in front of people to stay top of minds”.
Marketers are splashing more money into brand building advertising as companies recover from the early effects of the Covid-19 pandemic
Many brands sacrificed their brand spend in wake of the pandemic last year, focussing instead on short term tactical maketing and cutting their brand advertsiing budgets.
Speaking in an earnings call to mark Google-parent company Alphabet’s fourth quarter results, Philipp Schindler the Senior Vice President and Chief Business Officer, said there had been “substantial pullback at the outset of the pandemic” in brands spending on Google services but this began to recover in the third quarter of 2020.
The technology giant revealed ad revenue increased from $37.9bn (£27.4bn) in 2019 to $46.2bn (£33.8bn) by the end of its fourth quarter in 2020. Google’s combined advertising business, including YouTube accounted for 81% of fourth quarter sales, up by 23% year-on-year. The company also reported a “significant acceleration of brand spending on YouTube”, with the video streaming platform seeing advertising revenues increase 46% to $6.9bn.
“Marketers realised that even if there was a pullback in consumer demand in the short-term, they still needed to keep their brands in front of people to stay top of minds when spending picks back up”, adds Schindler.
Google highlighted L’Oréal as a shining example in adapting to the drastic change in consumer shopping behaviour. Schindler says the brand made a “sharp pivot to e-commerce” and the YouTube tool True View which is skippable ads that marketers are not charged for if skipped.
“By making existing video creatives more timely and actionable, their Kiehl’s US brand drove record visits to their site from YouTube, four times more per dollar. They’re also partnering with us to bring AR experience for their cosmetics across Google Services, including YouTube and Search”