Google’s Programmatic Ad Business Drove 2Q15 Growth

DoubleClick suite of products showing strong growth

Google (GOOG)(GOOGL) credited its better-than-expected 2Q15 earnings results to faster growth in mobile advertising, YouTube, and its programmatic ad business. We covered mobile and YouTube growth drivers in the prior parts of this series. Programmatic ads are the technological framework for conducting automatic real-time auctions of display ads. Google’s programmatic ad business includes DoubleClick Ad Exchange and DoubleClick Bid Manager. During the July 16 2Q15 earnings call, Google mentioned that both these businesses showed strong year-over-year growth.

Google’s Programmatic Ad Business Drove 2Q15 Growth

Google is now the second-ranked player among top video ad properties

Google has mentioned that it’s seeing brand advertising shift to programmatic ads, which include videos as well. Google’s Partner Select program has more than 50 publisher partners, including Hearst Television, Food Network, and BMW. According to Google, Partner Select is a “programmatic premium video marketplace” that helps publishers monetize their video content.

This push into the video ad market has helped Google take the second spot on the list of top video ad properties in the United States. BrightRoll is only ahead of Google in this market, according to a June 2015 report from comScore. LiveRail, Specific Media, and AOL (AOL) are the other players in this market, as the chart above shows. Incidentally, BrightRoll was acquired by Yahoo (YHOO) and LiveRail by Facebook (FB) a few months back.

Google has improved its ranking in this market from sixth position in February 2015 to second in June 2015, which shows that it has grown its reach by a large extent. For diversified exposure to Google, you could invest in the iShares U.S. Technology ETF (IYW). IYW invests about 4.3% of its holdings in Google.