← Behind the Numbers: an EMARKETER Podcast
Behind the Numbers: an EMARKETER Podcast
Is Google Quietly Losing? YouTube “Stations” Impact? 3 Big Questions for Google | Behind the Numbers
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A
Foreign. It's Friday, May 8th. I don't know why I do this with my hands. People who are just listening. It's for the best. It's chaos on video. Drew, Marissa and listeners, welcome to behind the Numbers E Marketer podcast. I'm Marcus and joining me for today's conversation we have senior forecasting analyst living in Nashville.
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B
I think that would be correct.
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A
Yes.
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B
Yes.
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A
Drew Spink, welcome to the show.
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B
Thanks, Marcus. Glad to be here.
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A
Yes, indeed. Are also joined by newsletter analyst living in New York City. I'm certain of that. Marissa Jones.
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C
Hi. Thank you for having me, Marcus.
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A
Why of course. We start with today's fact. The best selling video games ever. I'll be impressed. And this isn't a knock to you guys. I'll be impressed if you can guess one on this list because I didn't recognize. I knew two or three, but I would four or five. But I'm shocked that they're in the top of all time. The best selling video games in terms of units sold, if that makes any difference. According to HP and Bethesda 2025 data. What do you think's on this list?
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C
I would assume like at least one Mario game is on there.
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A
Bang. Mario Kart 8. Didn't realize they were up to that many.
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B
I bet Minecraft's on there.
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A
Mario Kart 8 is sixth. Minecraft, you said? Yeah, technically. So it's second on this list. But 350 million units sold, that would be compared to Mario Kart is 80 million. So it's like multiples higher than America. America's sixth place. So Minecraft is second. However, there is some dispute because Tetris was sold across different platforms.
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B
I was going to say Tetras is probably number one.
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A
Tetris is number one. Exactly. Yeah. So because it was sold across different platforms, people like that's cheating. So if you get rid of Tetris, Minecraft is number one. Tetris has 520 million units sold. Minecraft 350. And then another guess.
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B
Fortnite.
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A
Not even on the list. Exactly. That's my point. It's why there's no Call of Duty, no Final Fantasy, no Dark Souls, no Elden Ring, Grand Theft Auto 5.
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B
Oh, that makes sense.
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A
Actually, that does kind of make sense. 225 million. Fastest selling entertainment product in history, earning over $1 billion in three days.
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B
And GTA 6 is probably going on 20 years in development now. So I keep saying we're going to
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A
get it, but nothing.
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B
We'll get it when we get it.
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A
WWII sports in fourth, 83 million. So big drop back. Red Dead, Redemption. Battleground. What's this? Battlegrounds there. Terraria, Skyrim. Kind of makes sense. Sims.
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C
Oh, okay.
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A
Yeah, this just says the Sims. So I guess the original.
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C
I was gonna guess Sims or gta and I. I doubted myself. I should have never, never.
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A
Today's real topic. Sorry, I got carried away. The big three questions surrounding Google. All right, let's set the table. First, Q1, 20, 26. How did they do? Well, their parent company is called Alphabet. Their total revenue reached $110 billion. It's up 22 year over year. Not bad. That's nearly double last Q1's 12%. 70% of that money. Of that 110 billion, 70% of it comes from ads, which would be $77 billion. So $77 billion in advertising for Google, up 15% year over year. That's double last Q1 as well. So not bad. Again, the fastest growth in the last 16 quarters. YouTube, that grew. Call it 11%, 10.7%. And Q1 year over year. It's up a touch from last Q1, but we're here to talk about the big three questions surrounding the company. What is top of mind for us, for them, for others? Marissa, for you, what's one of the biggest questions for Google at the moment?
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C
So my biggest question comes from an announcement that came out essentially at the same time as its Q1 earnings were released. The SVP of Knowledge and information, Nick Fox, announced that Google is officially considering bringing ads to its Gemini chatbot. After in, I believe, December of last year, there was rumors that it would, and they very publicly and very firmly denied that that was a plan. So now they are saying this is a plan. This obviously comes at a time when OpenAI is pushing pretty heavily into ad. So my question For Google is OpenAI is already testing ads in ChatGPT. What is Google waiting to learn before deciding whether or not Gemini should remain ad free or introduce its own ads?
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A
So this is a good one right out the gate. In the 12 months to March, Gemini more than doubled its user base. So 350 million to 700. Over 750 million users. So certainly a question. The people go to a place and then the advertisers follow. What do we think they're waiting to learn? And is it too soon? Does this, does this make sense, this timing to you, Marissa?
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C
I think it could make sense if they're looking to be like the platform that overtakes ChatGPT at some point, which is obviously their biggest competitor. But I do think they are kind of waiting to see More results from OpenAI More proof that ChatGPT ads are effective and are working before they decide to introduce them.
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B
I think further to that, they already have a massive integrated search ecosystem that is already placed everywhere in AI overviews, in their AI mode and within their default search mode that they have this massive stack. So they're in, I mean their search revenue this quarter was up like 20%, which is crazy at this point in their earnings. So clearly they are still raking in a ton of cash from different types of placements. And I think that the fundamental way that those LLM ads are going to be structured is different than how they're doing the keyword search style ad. So I think they want to see the effectiveness of that type of LLM ad and at least at the moment they don't really need to roll it out yet while their search line is doing so well.
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A
Yeah, that search line as well, just contributing. I mean, you said it to your point, it grew 20% in the quarter. That's double last.
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B
Yeah, and I think further to that too, they can, I guarantee they have their own development ad like what they're kind of working on now, but they'll see what open AI or other people come out with and then they can, yeah, either steal it or make it better very quickly because they already have the massive stack and the advertiser base that they can offer it to.
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A
That's a great point. They're making more from search than they ever have. 78% of their money coming from search. That was a year ago. It was 76%, year before that, 75. So it's been creeping up slowly. One of mine was has Google validated its enormous AI spending through advertising growth? So, Gemini aside, Daniel Konstantinovich explaining that the staggering over 107% year over year increase in Capex shows just how steep big tech's investment in AI is becoming and how much pressure Google is under show that technology can drive revenue growth, saying advertising is one of Google's most visible proving grounds for AI's ability to do just that. And its growth suggests its strategy is working. In the past year, Danny explains, the company has released a flurry of AI advertising tools designed to target performance marketers and keep advertisers embedded in its ecosystem throughout the advertising process. And Marissa, you recently wrote that Google claims its AI powered ads have increased online sales by up to 80% for some brands, according to Modern Retail. What do you make of this question of Google validating this Enormous AI spending through advertising growth.
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C
I think they have some more validating to do. Yeah, I think, I think all AI platforms are introducing ads now have more work to do. It's such a nascent format. There really isn't a great way of measuring the effectiveness of these ads. So far OpenAI is doing something similar where they're really trying to prove that these ads lead to measurable returns. They're trying to change the measurement. But I think with the massive spending that companies like Google and other companies like Meta are doing with AI, there
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A
still needs to be more proof, maybe when will.
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B
I think that that can kind of tie into a question I had too, which is that Google clearly wins its search, but there's other areas in its ad machine that I think are losing. And what happens if the DOJ ruling against Google's ad stack monopoly? What happens to their search business in general? Like Google, just a deal with Sirius XM to be the provider for their audio ads. So interpret that how you want, but that kind of means that they have this massive audio Listener base on YouTube through their podcast network and through their music, but they can't seemingly advertise it effectively. Hence why they're giving all of that to SiriusXM so that people that are going to audio ads in the first place that would go to SiriusXM now have access to YouTube's ecosystem. And then additionally Apple Maps is going to be launching ads later this summer which will be a direct challenge to Google's Maps and that is going to be coming off of Apple devices in the first place. Like if you have CarPlay in your car, it usually kicks up Apple Maps before it kicks up Google Maps. So there will be some traffic issues there. And then some more issues would be retail media. So Amazon and Walmart take up around 89% of all the retail media dollars. Amazon last year pulled out of Google shopping ads and try and fix this. Google has inked some deals with like Albertson Media Collective and Critio to power people from retail platforms back into Google shopping ads. And then the last one would just be around the search monopoly that if they make them break up that search stack and they don't allow Google to pay multibillion dollar to Apple to be the default search provider. That is a massive loss in potential traffic to their search ecosystem. And Google is synonymous with search. When people are looking for things, they Google it. But if they take away the multi billion person access from phones going to that traffic, what does that look like for the total stack? So like you said Google is still dominating in how much money they're bringing in via search ads. But there's cracks all over their ad machine that competitors are trying to pull at the strings. Companies, especially like Meta, who are trying to catch up, and they have everything contained within their ecosystem in terms of social ads and their own integrated commerce stuff. So there's, there's challenges for Google going forward.
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C
I also have a question that's not super closely related, but is about search. So say Google stays the search giant, they win the monopoly case against them, but amid this huge AI push, this push that they're trying to prove they can monetize AI answers directly. In that scenario where they spend all this money on putting AI first as their core business model, does the traditional search results page start to matter less to advertisers in that scenario?
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A
What do we think? It's a great question.
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C
I think to a degree it already is starting to matter less. Advertisers are now really trying to optimize to appear in AI overviews that appear above even paid search results at times. So I think there is already a push where this is becoming slightly less relevant to advertisers. SEO is becoming less relevant, and GEO is really becoming a core focus for a lot of advertisers. So I think this is a shift that's already underway. But seeing kind of the search giant who like, really pioneered the search ad format, now really focusing on AI and potentially bringing AI to its chatbot and having ads and its AI overviews, I think the traditional search results page is already losing a bit of relevance.
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A
Yeah. Drew, what do you think?
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I think that just in terms of the investment question that we've been asking too, that they absolutely have to justify it because they need to maintain all of the search traffic so they will integrate all the AI tools, anything they can, to still make it the attractive product, to make sure that no other companies like OpenAI or Claude Eat their lunch. I think that that's like, if you're, if you look around all of their offerings, what's interesting is that there's still like, if you scroll all the way to the bottom of an AI overview, it's still a sponsored placement ad. These just traditional search ads, they're just showing up in weird places. But like, if you look for running shoes, like recommend me running shoes, it will give you answers. But those aren't necessarily ads, at least yet. That's like what their, their chatbot is scraping to find in terms of relevant answers. Scroll down, scroll down, scroll down. Then there's a search ad. So to Marissa's point of it being kind of less relevant, it kind of is to some extent, or at least until they figure out how to integrate their ads more into the organic traffic of the chatbots. So I think it'll be interesting to see how that rolls out, because I think that's the type of ad that OpenAI is going for. And then Google might see it, copy it, or see how that works, but they probably need to test it out at least in the meantime, they can just keep putting search ads, sponsored product placements, just everywhere in all their new placements.
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A
Yeah, everyone's kind of waiting until they get that killer ad, so to speak. And then I imagine people say, this works. Let's, let's all replicate that. All right, so I'm going to shift so for a second because I had this question and this question came from your mind without you knowing it. You wrote a piece and I read it and I thought it was fascinating. And basically the question is, are traditional TV stations the right model for YouTube as they tried to take over the living room? And so, Marissa, you recently noted that YouTube is leaning into its role as the new TV with the launch of its stations offering a feature providing 24. 7 access to linear style channels that directly take on traditional TV. For context, in the piece, you explain 70% of YouTube viewers, 70% of YouTube viewers, the 2/3 or 180 million Americans will watch YouTube via a CTV device this year, according to our forecasting team. And you also point out the CTV will account for the majority of time spent on YouTube in 2027, edging out mobile and desktop devices. So it's quietly, but then all of a sudden taking over the living room. And it's decided. I mean, not completely. You can still watch other types of content, but it is decided. Let's try that traditional model of just running channels. Maybe you can compare that to Spotify when they were like, you can pick any song you want. People like, I don't really want to do that. That's a lot of pressure. Can I just get a playlist? And they just like having something that continuously is running, you know, whether that's music, music, whether that's movies, TV shows. What do you make of this idea that they are trying to revert back to kind of the old model of tv to a certain extent?
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C
I think there's a lot of potential there. Like you said, 70% of YouTube's massive user base are already watching it on TVs. I think people are shifting away obviously from linear TV and looking for digital options. And if YouTube becomes this hub where you kind of get all in one TV style channels, you get creator content, you get short form video, you get long form video, it really does position YouTube not only as the new TV but as a very strategic place for marketers and advertisers to turn to because there's such a breadth of content there.
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A
Yeah, this is an interesting one, Marissa. The quote saying the new channels also align with the media world's broader push into creator led long form TV content. Which is a great point. I found it fascinating how they've made this pivot some of the stream platform, Amazon prime video, others Netflix. What do you make of this? Do we, I mean do we know that folks want this type of content, particularly young folks?
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B
I think they do. I think kids and young folks in particular who have just grown up with the Internet and maybe less linear TV that maybe I did when I was a kid, like they don't really watch cartoons anymore. They don't really engage with like Disney Channel shows or Nickelodeon shows that I did. In the same way they watch teenagers or people that are out doing quests or reviewing things or are influencing them with fashion or other products. So I think that there is definitely demand for it. I think that what's an interesting angle of them kind of becoming the king of the living room, at least in terms of like digital TV again is that I think that there's a lot of leakage in their advertising platform Oath, YouTube because like Google search ads coming in at almost 20% this year, their YouTube only came in at 10%. And where for at least for our forecasting, Google search has pretty much beat our expectations and many of the other players on the street every quarter for the last 6, 7/4 as they've been integrating their AI stuff, YouTube's been doing worse. So they can, they hold a lot of viewership. But I think a lot of the advertising that say like in podcasts come from the creator actually reading their own deal. It's not coming from Google making money on the ad. So they still have the creator rev split, but I think as they gain more viewers, they're going to try and roll out new types of advertisements to increase their profitability from that business line.
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A
Yeah, this is going to be interesting to see what this does. Yeah. For inventory and helping them to monetize this ridiculously huge audience that YouTube has. I also wonder if this is a behavior that's already happening in terms of like what share of videos are that we watch are autoplayed from the one before. But how many times do you sit down to watch something and you know five videos in you haven't clicked on anything. It's just serving you things up. That's basically traditional model of a channel. It's just not something that you've selected. It's just hopping between videos as opposed to being kind of pre programmed. So maybe it is something that people will be more familiar with them than I think. Drew, do you have any others for us?
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B
Is Waymo another sleeping giant in Alphabet's revenue lines? So as of March 2026, so five, they now have 500,000 paid writers which is doubled in six months. This was particularly relevant to me because Waymo is now launched in Nashville and they keep getting stuck on like train tracks or going down one way streets.
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A
This being their autonomous vehicles program.
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B
Exactly. But so they I think have around 350 million annualized revenue. They've raised around $16 billion and the CFO said it will meaningfully contribute to revenue by 2027. And Morgan Stanley had them projected at around two and a half billion in revenue by 2030. Which in terms of total Google is almost a rounding Eric at that point it's not that big of a drop in the bucket. But with their AI push just in general in terms of investing in data, Waymo is a huge data harvesting potential just in terms of writer behavior as well as they can advertise within the waymos. I think that's part of the reason Tesla's been so successful as a business, even though the vehicle manufacturing space is really difficult, is because they are a data company at the end of the day through their full self drive and as well as what their users are engaging with on their massive computer screen. It's middle of their car. So I think that Google is kind of pivoting into the same space with this acquisition. I think historically Google has had a hard time with hardware acquisitions. I think that they've kind of cannibalized those pieces like Motorola, Nest, Google Glass, Fitbit, HTC smartphones have all kind of disappeared once they've been integrated. But this one I don't think will be cannibalized in the same way. I think that there's a lot of potential for them here.
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A
This one's really interesting. I live in Austin for part of the year and they have them down there as well. And you can still see a lot of apprehension and some people using them, some people steering clear of them. But I think what's so fascinating about them is if you're going to realize this huge amount of potential in the connected car and advertising in a connected car, you need not just for your current car that you drive to be connected and serving you ads. That's one thing. But if you now have people's focused attention away from the road, and you can show them ads in that environment or, you know, all of a sudden, that becomes incredibly attractive. They know who you are. They know where you're going, exactly where you're going when you step out of the car, what the businesses you're going to see around you. So, yeah, this is. This is fascinating. Maybe this is another sleeping giant for them. All right, gang, there are questions. Marissa, which one are you keeping?
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C
Can I keep two?
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A
Absolutely not.
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C
So one I'm going to keep is yours, which is, how is Google going to validate AI spending via its ad growth? Okay, the second one I'm going to do is what is Google waiting for?
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A
I said no. You mean the second one you're going to.
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C
Oh, I thought you said yes.
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B
No.
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C
Okay, then I'll choose yours. I heard yes. I hear what I want to hear.
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A
What was the second one?
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C
Well, the second one I was going to say is, what was Google waiting for to introduce ads in Gemini? But I'll go with yours.
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A
Oh, okay. Yeah, that was also a good one. Well, one of us might pick that one, so maybe we can get that onto the list that way. She's trying to lobby you, Drew, but you decide for yourself. Okay? Don't be influenced by her. All right, Drew, what are you keeping?
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B
I like the Waymo one, I think, and then I like the YouTube one, too, I think, just in terms of breaking up kind of into just three different sections. So it's not all kind of like one. I mean, it would work as, like, one continuous thing and talking about, like, all AI and advertising, but I think maybe having some, like, different structure can be.
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A
Which one's the YouTube one?
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B
The one that you were talking about.
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A
Oh, TV stations.
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B
Yeah.
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A
Okay. Okay.
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B
And then being like, the king of the living room, basically, but them not having a lot of revenue from that line. So what are they going to do with it?
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A
You know what? I think I'm going to pick that one, actually, because I did. Marissa, I thought that one was brilliant. It came from your piece, so I'm going to keep that one as well. A lot of relevant questions here, but in terms of. Yeah, top three right now. How and when will Google validate its enormous AI spending through advertising growth? We've got. Is Waymo, another sleeping giant. And then artificial TV stations, the right model for YouTube as they try to take over the living room. That's our top three big questions for Google at the moment. And that's all we've got time for for this episode. Thank you so much to my guests for helping me put this together. Thank you first to Drew or is
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B
glad to be here. Marcus.
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A
Yes, indeed. Thank you to Marissa.
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C
Thank you for having me again.
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A
Absolutely. And thank you to the whole production crew. We've got Danny and Lance helping us out with this one. Thank you to everyone for listening to buying the Disney Marketer podcast. Subscribe and follow this podcast to know when we have new, new content for you. We'll see you on Monday, we hope. Until then, happiest of weekends. It's my friend's cat, so. But I might. I've been going over the last couple every day. They didn't even.
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B
I'm not.
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A
Don't. I don't need to. The food is automatic. The water is automatic. But I'm obsessed. This cat is. It's perfect. I don't like cats because they're normally mean. Like most 98 of cats are the worst. You think they're your friend, and then the. They start trying to claw you and they're like, I hate you. And then they're distant and you really want to hug, but they won't give it to you. But 2% of cats are the best ever. And she's one of those. I'm sure Holly is also one of those.
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C
Thank you.
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A
Yeah, I might take it. I might. How much? What's the jail time on that? Is that a real crime with someone else's. How they're gonna prove it? They don't have papers. I'm taking it. Sam.