Google Inc (GOOG)’s Fourth Quarter 2014 Earnings Conference Call Transcript

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Let’s begin with the performance advertising. We continue to [inaudible] the foundation of Google’s advertising business to reflect a multi-screen, constantly connected world. Mobile is now a behavior, not a device and it has a variety of unique characteristics. First, let’s talk about local advertising. On mobile consumers want to know about the stores and goods near them. We launched some exciting updates last quarter. In October, we announced local availability for product listing ads and local store front, products that give customers real time information about goods that are in stock close to where they are.

Major retailers like Macy’s and REI took advantage of these local inventory ads during the holidays. Overall, we saw strong engagement and results from big box retailers during the holiday season. A second priority has been the creation of new measurement tools. We recently added estimated store visits to our estimated total conversations measurement suite. Now, advertisers can see a reliable estimate of the number of times a search ad click drive the store visit. During the holidays, ULTA Beauty reported that 12% of clicks on search ads led to a store visit with significant gains in ROI from their AdWords search marketing spend. These mobile specific metrics help advertisers measure the full impact of their mobile marketing.

The third area of progress is apps. We have driven hundreds of millions of app downloads on Google Search, AdMob and YouTube. And this business continues to grow at a healthy clip. During the holiday season, Office Depot used Google Search Ads to promote their ElfYourself app that helps shoppers create videos of people re-imagined as dancing elves. By using Google Search Ads they saw a 65% conversion rate. We have recently enabled users to more seamlessly navigate between apps and the web and find what they are looking for in apps more quickly.

In organic search 15% of signed in users’ searches on Android now return deep links to apps. We also offer app deep linking in search ads. Booking.com uses Google Search Ads to drive installs and reengagement via deep linking for their mobile app.

Last quarter, we continued to see great traction with our established mobile advertising products as well particularly Google Shopping. Online growth remains strong with Google Shopping traffic on mobile devices up nearly 100% compared to Q4 2013. For much of the holiday season mobile shopping clicks exceeded those on desktop as users increasingly made purchase decisions on the go.

Now, I would like to turn to YouTube, where we continue to deliver great results for brand advertisers. YouTube now has more than 1 billion users. Everyday people watch hundreds of millions of hours of video on YouTube, generating billions of views. Watch time is up 50% year over year. We continue to invest in our YouTube partners and partner revenue has increased by more than 50% year over year. We’re seeing great momentum in mobile advertising on YouTube. Mobile revenue on YouTube is up more than 100% year over year. TrueView, where advertisers play, pay only if someone watches their ad also continues to do very well. Walmart U.S.’s holiday performance is one of many success stories. During the week of Black Friday, they used YouTube’s TrueView format to drive a 300% week over week increase in views of their channel and more than 28 million views on the week.

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