Google-parent posts Strong Q2 results on digital Ad growth amid decision to keep third-party cookies

Google-parent Alphabet Inc. reported growth in second quarter revenue and profit, beating the street estimates. The revenue for the quarter ending June was reported $485 billion, up by 14% year-on-year, driven largely by a rise in digital advertising sales and Cloud business. 

“Our strong performance this quarter highlights ongoing strength in Search and momentum in Cloud. We are innovating at every layer of the AI stack. Our longstanding infrastructure leadership and in-house research teams position us well as technology evolves and as we pursue the many opportunities ahead,” said the chief executive officer, Sundar Pichai.

Advertising revenue topped $64.6 billion exceeding analysts' expectations of $64.5 billion, and up from $58.1 billion last year, a 11% increase. The demand for digital ads is driven by events such as the Paris Olympics starting this month and elections taking place across several countries this year including India and the US.

The reported growth in Google’s ad revenues coincides the tech giant’s plans to continue with third-party cookies. To be sure, on Monday, Google announced that it is reversing its plans to abolish third-party cookies. Cookies are pieces of data sent to your browser by a website you visit. They are considered the backbone of digital advertising, allowing brands to understand user behaviour and deliver personalised ads. In 2020, Google said that it would end support for cookies and develop a solution that works for users, publishers and advertisers by early 2022. At the time, experts noted that the removal of third-party cookies threatened the primary revenue source for many websites reliant on targeted advertising. 

Backtracking on the earlier plan, the company said this week that it will instead introduce a new system that will allow users to select their tracking preference, giving greater control over their browser data. 

"Rather than phasing out third-party cookies, we are developing a new experience in Chrome that enables users to make informed decisions about their tracking preferences," Anthony Chavez, Google's Vice President of Privacy Sandbox wrote in a blogpost. "These choices will be applicable throughout their web browsing and can be adjusted at any time."

Notably, over 40.9 of websites globally use cookies to gather data on users, according to data from web technology research firm W3Techs.