Reduced ad spending by financial companies, notably those dealing with crypto assets, has been largely cited by Google as the cause of a slowdown in revenue growth. Philipp Schindler, Google’s Chief Business Officer, acknowledged seeing lower search spending during the third quarter during the parent firm Alphabet’s earnings call on Tuesday.
With only one exception, at the start of the Covid-19 outbreak, the three-month period was Google’s poorest among all quarters since 2013, with an overall ad growth of 6%. Google CEO Sundar Pichai cited the impact of the adverse macroeconomic environment on the ad business as the reason for the decline in annual YouTube ad income.
“For example in financial services, we saw a pullback in the insurance, loan, mortgage, and crypto subcategories.”
Compared to their all-time highs, major cryptocurrencies like bitcoin (BTC) and Ethereum (ETH) had an almost 60% decline in value in 2022. Since then, there have been numerous insolvencies of hedge funds and lenders, including Celsius Network, Voyager Digital, and Three Arrows Capital.
After going public in 2021, the top American cryptocurrency exchange Coinbase reduced its employees by 18% and had a 70% decline in its stock price this year. In the third quarter of this year, Google declared a collaboration with the cryptocurrency trading platform.
In a hint that the internet giant believes the crypto winter will pass quickly, Google revealed in October that it will rely on Coinbase to let consumers pay for its cloud services with cryptocurrency starting in 2023. Additionally, it is anticipated that Coinbase would shift its data-related applications to Google’s cloud platform.