Google’s parent company, Alphabet, experienced a decline in revenue in part due to reduced spending in cryptocurrency advertising as a result of the ongoing bear market.
A slowdown in crypto ads is yet another contraction in the digital asset space brought on by the year-long bear market.
Crypto Winter Contributed to Google’s Missed Earnings
The third-quarter 2022 financial results published on Tuesday (October 25, 2022) showed that while Google’s advertising revenue was $54.4 billion, compared to $53.1 billion in 2021, YouTube ads fell to $7.07 billion from $7.20 billion the previous year. Revenue ad growth slumped to 6%, compared to 41% recorded in 2021, the lowest ever since 2013, as noted by CNBC.
According to Philip Schindler, Google’s chief business officer, a reduction in crypto ad spending was partly responsible for the company’s Q3 2022 performance.
“In the third quarter, we did see a pullback in spend by some advertisers in certain areas in search. For example in financial services, we saw a pullback in the insurance, loan, mortgage, and crypto subcategories.”
Meanwhile, Google’s statement that a crypto advert lull contributed to a shortfall in revenue is perhaps a testament to the increase in prominence of the industry. This is considering the fact that Google once banned cryptocurrency-related adverts in 2018. In June 2021, the search engine giant lifted the ban, which took effect in August of the same year.
The latest development comes shortly after Google partnered with major crypto exchange Coinbase to accept crypto payment for cloud services.
Increased Scrutiny on Crypto Promotions
Apart from the bear market causing a decline in crypto advertising, the crypto promotional space has also come under pressure from regulators. From the UK to Singapore, regulators have read the riot act against crypto promotional activities.
Such is the extent of these measures that it has even affected such companies looking to display their logos in sporting events like Formula 1. Recent races in France and Singapore have seen firms unable to display their brand images on the race track.
Crypto influencers have also come under scrutiny in places like the United States and India. Authorities in India are looking into crypto ads put out by social media personalities in the country. A report from back in the summer stated that influencers were behind over 90% of the misleading crypto adverts on the internet in India.