Yahoo Finance Alphabet's (GOOGL) Google Introduces Ads Transparency Center
Alphabet’s GOOGL division Google is constantly making solid efforts to strengthen its advertisement (ad) business and improve its search results.
The company has developed a new tool, the Ads Transparency Center, designed to enable users to know about the ads they see on Search, YouTube and Display.
It will act like a searchable hub of all ads served by verified advertisers. Moreover, it will show the ads served in the last 30 days from the company’s list of verified advertisers.
The information it will provide about any ad will include the advertiser of the ad, the regions where the ad was shown, the last date the ad ran and the format of the ad.
Users can access the new tool directly or through My Ad Center by clicking on the three-dot menu next to ads.
We note that the latest move bodes well for Google’s growing efforts toward making its advertisement business, which is the cash cow of Alphabet, more transparent.
The company recently revealed that it removed 5.2 billion bad ads and restricted more than 4.3 billion ads. It also suspended more than 6.7 million advertiser accounts in 2022.
We believe that the latest move and the bad ad removal move will help the company overcome the increasing pressure to prove the transparency of its advertising products and services.
Alphabet Inc. Price and Consensus
Alphabet Inc. price-consensus-chart | Alphabet Inc. Quote
Google Joins Meta & Twitter
With the latest move, Google joins Meta Platforms META and Twitter in the ad transparency game.
Meta and Twitter offer similar tools to reflect the transparency of their ad services.
Meta recently launched an iteration of its “Why am I seeing this ad?” tool, launched about a decade ago. This tool aims to help people learn more about the ads they are seeing. The new version is likely to bring more transparency, as it provides information about how a user’s online activities are used to deliver more relevant ads by leveraging Machine Learning technology.
Meanwhile, Twitter used to offer the Ads Transparency Center (ATC), later replaced with an archived version of ATC data, to provide relevant information on ads.
Other Efforts to Bolster Google Ad Services
Apart from the Ads Transparency Center introduction, Google recently added new features to strengthen its Discovery ads. The features include product feeds and various layouts, product-level reporting, data-driven attributions, maximum conversions, and conversion lift experiments.
Coming to YouTube ads, the company recently unveiled the YouTube Cost-Per-Hour Masthead, which complements the existing Cost-Per-Impression Masthead, to provide advertisers full share-of-voice during the hours.
In addition, the company is testing new designs to improvise the organization of a product ad to help large and small businesses reach their goals. The design updates include a new navigation menu, a reorganized interface and a refreshed look and feel.
We believe that the Ads Transparency Center’s efforts to remove bad ads and the endeavors mentioned above will contribute generously to the performance of Google’s advertisement business, which has been suffering from a slowdown in digital advertising for the past few quarters.
In fourth-quarter 2022, total Google advertising revenues fell 3.6% year over year to $59.04 billion and accounted for 77.6% of the total revenues.
Moreover, growing prospects for the advertising business will likely drive growth in Google Services revenues, which will benefit Alphabet’s overall performance and likely instill investor optimism in the stock.
For 2023, the Zacks Consensus Estimate for the company’s total revenues is pegged at $247.1 billion, indicating growth of 5.6% from that reported in 2022.
Coming to price performance, GOOGL has lost 29% in the past year compared with the industry’s decline of 29.4%.
Zacks Rank & Stocks to Consider
Currently, Alphabet carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector are Arista Networks ANET and Analog Devices ADI. While Arista Networks sports a Zacks Rank #1 (Strong Buy), Analog Devices carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Arista Networks shares have risen 16.9% in the past year. The long-term earnings growth rate for ANET is projected at 14.17%.
Analog Devices shares have rallied 14.5% in the past year. The long-term earnings growth rate for ADI is projected at 10.5%.
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