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Why Google Is Resuming Rehab Facility Advertising

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Google resumes substance abuse treatment center advertising

Alphabet’s (GOOGL) Google decided to resume accepting advertisements on its search engine from alcohol and drug addiction treatment centers in the United States beginning in July 2018. Google suspended these ads last year, as some people are vulnerable to such ads and some advertisers misused them to make profits.

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Google partners with LegitScript 

Around 64,000 people in the US have died in 2016 due to substance misuse. Therefore, Google is partnering with LegitScript, a provider of verification and monitoring services for online pharmacies, to help certified treatment centers to advertise on Google. 

The substance abuse treatment centers will now need to get LegitScript certification, which will assess these centers. Such centers will then have to get certified by Google to be allowed to advertise on Google to appear on results pages. LegitScript will check the validity of Internet pharmacies, supplement sellers, and other online merchants for these rehab centers. The new US rules will apply to ads for rehab centers, addiction services, and crisis hotlines for drug and alcohol addiction.

Advertising revenue growth 

The Google segment is the primary contributor to Alphabet’s ad revenues. In 4Q17, Alphabet generated around $27 billion of ad revenues. Other than Google, social media companies Snap (SNAP), Facebook (FB), and Twitter (TWTR) also rely on advertising for most of their revenues.

In 4Q17, Snap’s advertising revenue accounted for 98.4% of the company’s total revenue, while Facebook’s advertising business accounted for 98.5% of its revenue. Yelp’s (YELP) advertising represented 95.5% of its revenue for the same period. Twitter and Alphabet earned 84.2% and 88% of their revenues, respectively, from advertising sales in 4Q17.

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