Skift Take

Alphabet officials didn't mention ChatGPT, Bing or Microsoft during the company's first quarter earnings call. But like modern-day bards, they gave an impassioned defense of their abilities to meet the artificial intelligence challenge.

Google advertising, search and other revenue revenue grew 2 percent year over year in the first quarter, pushed upwards by increases in revenue from travel and retail ads.

“In Google Advertising, Search and Other, revenues grew 2 percent year-over-year, reflecting an increase in the travel and retail verticals, offset partially by a decline in finance,” Alphabet Chief Operating Officer Philipp Schindler told financial analysts Tuesday as Google’s parent company publicized its first quarter financial results.

That reversed a 1.6 percent revenue decline in these categories in the fourth quarter, which ended December 31.

Schindler said excluding currency headwinds, revenue trends for search advertising were actually similar in the first quarter versus the previous quarter.

“I’d say maybe more broadly, what we saw reflects what’s being reported elsewhere, and across the headlines, many companies are very focused on shorter-term profitability amidst this uncertainty and some pullback at budgets as well,” Schindler said.

On Tuesday, Google touted a year-old hotel advertising tool, Performance Max, which enables hotels to create digital ads in multiple formats to reach travelers across six of its ad channels, namely YouTube, Display, Search, Discover, Gmail and Maps, as being particularly effective.

Online travel agencies, which often have more marketing resources, might prefer to create channel-specific campaigns, but Performance Max for hotels streamlines the multi-channel creative process.

Corissia Hotels Group in Crete, Greece saw a 32 percent revenue increase, and a 26 percent rise in direct bookings after using the Performance Max tool for one month, Schindler said.

“There’s more to come here as we add even more AI … features. Stay tuned for more at Google Marketing Live in May,” he said.

Attracting direct bookings, rather than relying on online travel agencies with their relatively high commissions, is often a key goal for hospitality companies.

A substantial chunk of the call with analysts revolved around the launch of Google’s generative AI chatbot, Bard, and the company’s focus on further developments.

“Google currently holds more than 90 percent of search market share,” CNBC reported. “[CEO Sundar] Pichai said he’s comfortable that Google will continue to improve search and will be competitive in the big deals” with cellphone manufacturers such as Samsung and Apple as Google competes with Microsoft’s Bing and ChatGPT.

Saddled with restricting and severance costs tied to layoffs several months ago, Alphabet saw its net income fall 8.4 percent year over year to $15.05 billion. Total revenue rose 2.6 percent year over year to $69.78 billion.

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Tags: advertising, alphabet, apple, artificial intelligence, bing, earnings, gmail, google, google maps, google travel, hotel tech, hotels, microsoft, samsung, search, youtube

Photo credit: A view of a lake view from Hotel Caritas in Goma, the Congo. Google said the brand used a new hotel advertising tool to increase direct bookings. Source: Flickr/Gerda Postelmans Gerda Postelmans / Flickr

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