July 22nd-July 28th // Estimated Reading Time: 9 minutes
Below is a roundup of last week’s notable industry news, with summaries and our opinions. First up: we’ll try to make sense of Google’s Q2 earnings…
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Q2 Earnings!
Alphabet (🤷): Revenue was up 24% to $119.8B, beating estimates. Search revenue grew 17% and cloud revenue jumped 82% to $24.8B because of AI demand. YouTube ad revenue was up 13% to $11B, but growth is slowing due to TikTok and Netflix competition. Alphabet said it would spend $195B-$205B on AI infrastructure this year, up from $180B-$190B. Investors didn't like that. Shares fell more than 4%🔒 in after-hours trading but have since rebounded a bit.
Comcast (🤷): Revenue was down 1.2% to $29.94B, beating estimates of $29.3B. Peacock hit profitability for the first time, helped by the FIFA World Cup and NBA playoffs, driving NBCU-related revenue up nearly 23%. Broadband and cable TV remained under pressure as Comcast prepares to split NBCUniversal and Sky from broadband. Shares were roughly flat.
Havas (👍): Organic revenue was up 2.5%, driven by North America, which had 6.4% organic growth, and key wins like Farmers Insurance. The agency holding company cited its AI operating system, Converged.AI, for helping with client retention. Havas confirmed its full-year guidance of 2%-3% organic growth. Shares rose 6.6%🔒.
Omnicom (👎): Organic revenue was up 6.1% in Omnicom's core operations (the agencies it plans to keep post-merger), beating estimates. CEO John Wren said clients are consolidating their work with the agency holding company, which had big wins in Q2 like Adidas. Investors wanted more. Shares fell 1%-2% in after-hours trading.
Opinion: Let’s put aside AI spending for a moment. If you look at revenue growth numbers, Google is crushing it. Of course, Cloud is leading the way. But ads are no slouch. Google's touting 50% more conversions from Performance Max and AI Max versus search while performing at a similar ROAS. Search revenue going up 17%, despite the “AI killing search” narrative is an incredible story. Commercial queries (e.g. “help me find a great SUV”) are still helping Google monetize search through traditional search ads; the “damage” is concentrated in informational searches, but Google never made much money off those anyway. If anything, those searches are turning into stickier AI mode experiences that help Google collect more user data and enrich paid ads elsewhere.
YouTube's 13% growth looks more modest, and this WARC data shows why: ad revenue growth has slid three years running, from 14.7% to 11.7% to a forecasted 7% this year, as TikTok and Netflix (and probably Amazon) win lower-funnel budgets YouTube still hasn't.
Reach isn't the issue for YouTube, conversions are, which is why YouTube is leaning heavily into Shorts (which are more conducive to driving an immediate action).
Google serves as a bellwether for the ad industry, so, big picture, these results are positive. As user attention shifts to new channels (AI, CTV), the ad platforms and marketers are aware and working hard to stay ahead of it.
Now we await the remaining Q2 earnings reports.
Other Notable Headlines 👀
NBCUniversal and YouTube ink deal to embed Peacock in the video platform for premium subscribers - NBCUniversal and YouTube have reached a multiyear deal that will bring Peacock's full content library into the YouTube Premium subscription in the US starting in early 2027. That includes NBC Sports' NFL and NBA coverage, Universal films, and originals like "Love Island USA." Peacock's content will be ingested directly into YouTube, so subscribers won't need to leave YouTube to watch. Huge win for YouTube as a streaming “consolidator". The deal also renews NBCUniversal's carriage agreement for YouTube TV, keeping NBCU's channels on the live TV streaming service, and expands ad tech collaboration between the two companies, including through FreeWheel.
TikTok is testing a rival to Amazon Prime as it looks to create a US e-commerce giant🔒 - TikTok is piloting TikTok Shop Plus, a paid membership offering perks like free shipping, product discounts, and coupons at price points of $6, $10, or $15 a month. A former TikTok Shop staffer told Business Insider the goal is to stop shoppers from discovering products on TikTok and then jumping over to Amazon to complete the purchase. The move follows a pattern of TikTok mirroring Amazon's playbook, such as standing up its own fulfillment service and fast delivery options. It's unclear when or if the program will roll out more broadly. Amazon did retail first, then expanded into streaming video. Can TikTok successfully go in the opposite direction? We’re skeptical.
EU hits Google with a $1B fine, and rivals want a piece too🔒 - The European Commission issued the billion-dollar penalty against Google under the Digital Markets Act for past violations favoring its own shopping, travel, and search services over competitors. It's the second major DMA action against Google this month, after regulators ordered Google to share anonymized search data with rival search engines and make Android interoperable with other AI assistants. Google now has 60 days to pay the new fine or face penalties of up to 5% of its global revenue, adding to more than $11B paid out in EU fines since 2017. The action is also fueling rival lawsuits across Europe, with lawyers estimating private damages claims could total up to $10B, including a $3.38B suit from Italy's Moltiply Group and a roughly $1.97B award in Sweden's PriceRunner case.
Amazon's million-dollar seller revolt - A community of top Amazon sellers called “Million Dollar Sellers” withheld ad spend earlier this year over a series of changes squeezing their margins, including Amazon's plan to stop accepting credit card payments for ad campaigns. That boycott earned them a partial win, pushing the credit card deadline from April to August 1st, but sellers say plenty of other issues remain unaddressed. Those include a new rule delaying seller payouts by a week, fuel surcharges, and ad placements on off-platform sites and AI chatbots that can’t be turned off. With Amazon showing no signs of giving further concessions, many sellers are quietly building out their presence on TikTok, Meta, Walmart, and Target instead.
Google quietly gives ground on PMax controls🔒 - Some media buyers can now use a checkbox in Performance Max that excludes third-party search inventory and the Google Display Network from their PMax campaigns. The change addresses a years-old complaint that PMax hands spending decisions to an algorithm without showing advertisers which channels or inventory they're buying. Agencies like Crossmedia, Moroch, and Duncan Channon report the added transparency is winning back PMax skeptics. PMG says the new levers have pushed several clients to shift budget from Google Shopping into PMax. Google calls it a limited pilot and hasn't shared a timeline for broader access. Some agencies say their requests to test the feature have been turned down.
Other Notable Headlines
(that you should know about too) 🤓
LUMA Partners' Q2 report shows M&A activity holding steady🔒 - There were 23 $100M+ deals in Q2, up from 16 in Q1, in a sign that bigger transactions are driving M&A activity. Standout transactions included Fox's $22B acquisition of Roku and Publicis' $2.1B purchase of LiveRamp.
PubMatic hands off its Prebid web wrapper, keeps its mobile SDK - PubMatic is offloading its Prebid integration wrapper to Playwire. It's holding onto its mobile app monetization tool.
Paramount agrees to postpone Warner Bros. Discovery merger until after antitrust trial - Paramount Skydance struck a deal with a coalition of state attorneys general to hold off closing the $111B deal until five days after an antitrust trial or June 1st, 2027, whichever comes first.
Yelp partners with ChatGPT to surface reviews - Yelp is licensing its reviews, photos, and business data to OpenAI, letting ChatGPT pull in local recommendations complete with Yelp branding and links.
Meta is fighting a mountain of social-media lawsuits, at just the wrong time🔒 - Thousands of lawsuits over teen mental health are pending as Meta pours billions into AI. Four state AGs are seeking up to $1.4T in damages from Meta over teen safety claims.
Can Netflix survive the end of the binge-watch era? - Netflix's audience for top shows drops 30% to 70% in their second seasons, and daily viewing time has slipped as YouTube overtakes it in average daily watch time.
How 4 retailers are pitching creative ad formats🔒 - Albertsons, Instacart, Amazon, and Walmart are all building out creative offerings for advertisers, from branded microdramas to Prime Video product placements, hoping to boost ad budgets beyond standard ad units.
How Warner Bros. Discovery is creating value out of dead air with pause ads - WBD says pause ads turn a paused screen into an attention-grabbing moment for advertisers. Gen Z and millennials are on board, with 67% preferring them over a frozen screen, per DirecTV and Magna research.
AI slop is fooling advertisers' verification tools🔒 - A new TAG, ANA, and Fiducia report found content on AI-generated "slop" sites is passing brand safety checks and sometimes earning higher CPMs than legitimate publishers.
That’s It For This Week 👋
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