Tech giant Google’s (GOOGL) relationship with publishers has become strained as its move toward AI-powered search has reduced the web traffic being sent to content sites. To rebuild trust, Google is making changes to better support publishers, according to The Information. Indeed, teams within Google Ad Manager—the division that helps publishers sell ad space—have begun hiring new staff in order to promote the platform to large advertisers and ad agencies. The plan is to increase premium ad spending on publisher websites, which could boost their revenues.
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Interestingly, publishers say that they typically earn less when using Google’s ad tools compared to working with competitors like PubMatic (PUBM) and Magnite (MGNI). That’s because Google’s platform is primarily used by small businesses, which tend to pay less for ads. Meanwhile, companies like PubMatic and Magnite focus more on attracting large advertisers. In addition, one publisher reported a steady drop in revenue from Google’s ad tech tools over the last three years, blaming it on Google falling behind rivals.
However, in addition to staff changes, Google is launching new products for publishers. One example is Offerwall, a tool that lets readers access articles by either paying directly or watching an ad. This is part of the move to give publishers more ways to make money. It is worth noting that Google had launched a similar product in 2017 called Funding Choices, but it didn’t promote it much, so it failed to gain traction. Moreover, Google has recently focused more on DV360, its ad platform that sells ads on YouTube and third-party websites, which is more profitable and faces less legal scrutiny.
Is Google Stock a Good Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on GOOGL stock based on 29 Buys and nine Holds assigned in the past three months. Furthermore, the average GOOGL price target of $199.77 per share implies 11.5% upside potential from current levels.
