Alphabet’s (GOOGL) Ad Initiatives Likely to Aid Q3 Earnings…

Alphabet Inc. (GOOGL Free Report) is slated to report third-quarter 2018 results on Oct 25.

Google’s search platform continues to be its primary revenue generator. The company offers services for both performance and brand advertising.

Google’s expanding ad services portfolio, robust search engine, improving search features and strategic partnerships are expected to drive its ad revenues in the to-be-reported quarter.

In the second quarter, Google generated revenues of $28.1 billion from advertisement which accounted for 86% of the gross revenues. The figure surged 23.9% year over year and comfortably surpassed the Zacks Consensus Estimate of $27.7 billion.

Google properties continued to be the primary contributor which accounted for 82.8% of the total ad revenues. Meanwhile, the network members contributed 17.2% to the ad revenues.

For the third quarter, the Zacks Consensus Estimate for total ad revenues is pegged at $29.1 billion. Further, the Consensus Estimates for ad revenues from Google properties and network members are projected at $24.4 billion and $4.7 billion respectively.

Click here to know how the company’s overall Q3 performance is likely to be.

Strengthening Search & Ad Initiatives

During the third quarter, Google has unveiled a number of new features on its search engine namely Featured Videos, Activity Card, Collections, Enhancing Topics, Discover, Image Search, Google Lens and Pathways. Further, it has introduced Discover feed specific preferences for the languages and additional related content features.

These updates are aimed at enhancing the search results and modifying the feed content. Further, Google is improving job search results by providing information on training programs depending on the type of job being searched and its availability.

Additionally, the company rolled out a new search engine called Dataset Search to cater to the needs of scientists and data journalists primarily.

Further, Google joined forces with Shopify (SHOP Free Report) and unveiled a new ad tool which is almost tailor-made for retailers and e-commerce businesses. The company’s new tool will enable the merchants to showcase their consumer product ads.

Furthermore, Google’s partnership with Mastercard (MA Free Report) allows it to access the data on shopping habits of the U.S customers holding Mastercard. To be precise, the data indicates whether a click on an online products ad by a customer is leading to ultimate purchase of that product at physical stores. Notably, this information is very crucial for the advertisers.

However, this might lead to another big data privacy challenge. In fact, this is an issue that the has been plaguing the tech giant in recent times.

Zacks Rank & Stock to Consider

Alphabet carries a Zacks Rank #3 (Hold).

A better-ranked stock in the broader technology sector is Match Group, Inc.(MTCH Free Report) carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term earnings growth rate for Match Group is currently pegged at 12.5%.

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