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Google Bolsters Advertisement Business With New Features

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Alphabet’s (GOOGL - Free Report) Google is making every effort to gain momentum in the advertisement world amid the coronavirus (COVID-19) pandemic by promoting the interest of businesses, which have been impacted severely by the unprecedented catastrophe.

The latest advertising features, which are focused at the welfare of the small businesses, are testament to the same.

One of these features include booking for services using Local Services ads by Google that is known for connecting customers to the trustworthy service providers, Local Opportunity Finder, local store information, smart campaigns and Grow My Store for retailers.

Google strives to ensure seamless customer-business connectivity on the back of the new features. This remains crucial amid the pandemic as businesses have been battered significantly by COVID-19-induced economic disruptions.

We believe the new features will drive momentum across the company’s advertisement business. Moreover, advertisement remains the key catalyst behind the robust Google segment,which has been contributing significantly to Alphabet’s top line all these years.

Further, the company has been gaining investor confidence courtesy of its well-performing Google segment.

Coming to the price performance, Alphabet has returned 27.6% over a year, outperforming the industry’s rally of 8.6%.

More on the New Ad Features

Thanks to the stay-at-home restriction, the demand for local services has risen significantly. In this dire situation, customers will be able to book for services like carpet cleaning or air conditioner repairing among others seamlessly by utilizing Google Search via Local Services ads under which the service professional are entrusted with Google Guarantee.

Further, Google has expanded smart campaigns to 150 countries. With these, the company is helping the small merchants offering curbside pickup and delivery to promote their businesses for free on Google Maps. Notably, these campaigns will allow the small businesses to highlight their services by placing a promoted pin on Google Maps.

Furthermore, the social distancing protocol and fear of contracting COVID-19 are driving demand for real-time updates on product availability, locations, and obtain ability of delivery or pickup services. The new helpful local store information feature on the Shopping Tab will enable customers connect to merchants offering the specific product they are seeking.

Additionally, Grow My Store feature, which is currently available in the United States and Europe, offers useful suggestions to small merchants to help them grow their business online efficiently.

Further, Local Opportunity Finder feature provides suggestions to businesses in order to help them improve their profiles on Google.

Alphabet Inc. Revenue (TTM)

Alphabet Inc. Revenue (TTM)

Alphabet Inc. revenue-ttm | Alphabet Inc. Quote

Wrapping Up

We believe all the above mentioned benefits of the newly introduced features are expected to aid Google in gaining traction among the small businesses. This, in turn, will drive the company’s advertising revenues.

Further, the latest move is in sync with its efforts to strengthen advertisement business amidthis pandemic by serving the interest of businesses and publishers.

Apart from the new ad features, in the beginning of the first quarter, Google waived off the fee that the news publishers had to pay to the company for ads to be shown on their online properties by using Google Ad Manager for the next five months.

The fee-waiver is likely to benefit publishers who are bearing the brunt of sluggish spending by advertisers owing to coronavirus-induced disruptions. This, in turn, will help Google in sustaining momentum across the news publishers during this pandemic.

All these efforts will continue to strengthen its presence in the digital advertisement market.

Zacks Rank & a Stock to Consider

Currently, Alphabet carries a Zacks Rank #3 (Hold).

Investors interested in the broader technology sector can consider some better-ranked stocks like Zscaler, Inc. (ZS - Free Report) , Dropbox, Inc. (DBX - Free Report) and GoDaddy Inc. (GDDY - Free Report) . While Zscaler and Dropbox flaunt a Zacks Rank #1 (Strong Buy), GoDaddy carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for Zscaler, Dropbox and GoDaddy is pegged at 57.53%, 32.51% and 23%, respectively.

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