Shares of Google’s parent company Alphabet rose to a 52-week high on Wednesday following reports of upcoming changes in its core advertising business.
Report Indicates Advertising Business Restructuring
The Information reported on Tuesday that Sean Downey, who leads Google’s advertising business in North and South America, said at an all-staff meeting in the department that the company’s advertising sales unit, which includes 30,000 people, will be reorganized, according to sources familiar with the matter. It was not specified whether the changes would include layoffs.
Relying on AI for Ad Generation
Alphabet is relying on artificial intelligence to generate and place ads on Google, YouTube, and its other platforms. Alphabet generated $54.5 billion in revenue, or 80% of total revenue, from ad sales in the third quarter.
Generative AI can be significantly cheaper than traditional methods for both ad creators and sellers. WPP, the world’s largest advertising company, struck a deal with Nvidia in May to create an AI-enabled content development engine.
“Cost savings could reach 10 to 20 times”, said Mark Read, CEO of WPP, to Reuters.
Alphabet’s Stock Rises
Alphabet’s shares rose 1.6% to $138.82 with about 45 minutes left in the regular trading session on Wednesday, after reaching a 52-week high of $141.70 earlier in the day.
This increase in stocks follows reports of upcoming changes in Alphabet’s core advertising business, which accounts for about 80% of its total revenue.
These reports come as Alphabet relies on AI to generate and place ads on Google, YouTube, and its other platforms. Alphabet generated $54.5 billion in revenue, or 80% of total revenue, from ad sales in the third quarter.
Generative AI can be significantly cheaper than traditional methods for both ad creators and sellers. WPP, the world’s largest advertising company, struck a deal with Nvidia in May to create an AI-enabled content development engine.
“Cost savings could reach 10 to 20 times”, said Mark Read, CEO of WPP, to Reuters.
After reaching a 52-week high, Alphabet’s stock price was $138.82, reflecting a 1.6% gain, about 45 minutes before the end of the regular trading session on Wednesday. The shares had risen to a 52-week high of $141.70 earlier in the day.
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The Information. “Google Plans Ad Sales Restructuring as Automation Booms.”
WPP. “WPP partners with NVIDIA to build generative AI-enabled content engine for digital advertising.”
Reuters. “From Mad Men to machines? Big advertisers shift to AI.”
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