Google India reports 55.7 per cent increase in gross ad sales

Google India Pvt Ltd collected Rs 24,926.5 crore worth of advertising from Indian advertisers in FY2022, registering a 55.7% increase from the previous fiscal year, according to the latest regulatory filings.

The surge in gross ad sales signals an accelerating switch to digital advertising by advertisers after the pandemic increased the use of connected devices.

It paid a Rs.1,370.7 crore countervailing levy to the local tax authorities for the financial year ended March 31. This was 6% of the Rs. 22,845 crore paid by the Indian entity to Google Singapore Pte for the purchase of the advertising inventory.

Google India acts as a third party advertising space provider through the Google Ads program and other Google advertising products and services.

Aside from advertising sales, Google India also makes money by providing information technology services and IT-enabled (ITeS) services to its group companies worldwide.

According to its revenue recognition policy, the tech giant reports net revenue (gross revenue minus purchase price) from the sale of advertising space, company products and the related direct cost of sales.

In the 2021-22 financial year, Google India reported total revenue of Rs.9,286 billion (net revenue from operations) and net profit of Rs.1,238.9 billion.

The company, which frequently tops workplace surveys in India, spent Rs. 2,821 crore on salaries, bonuses and other allowances to employees and distributed Rs.

According to the documents filed with the Ministry of Enterprise Affairs, the net revenue included Rs 2,137.8 crore from IT and ITeS services for Google Ireland and Rs 4,978.5 crore from Google LLC for the services provided to it. Net sales of advertising brought in a further Rs. 2,080.9 crore, while sales of corporate products brought in Rs. 88.8 crore.

The company products are services like Gmail and Google Docs that customers are billed for.

“Digital is becoming a very important touch point in consumer journeys across products and services. Business leaders now understand its importance and are allocating money accordingly,” said Prasad Shejale, founder and CEO of Logicserve Digital.

Amit Tripathi, managing director of IdeateLabs, said while other social media platforms act as push-based advertisers, Google brings in pull-based advertising, which kicks in when a person has the intent to buy a product or content based on their immediate Need to buy .. “Around the world, need-based advertising is the most preferred format. Google search and YouTube control 95% of search traffic between each other. They have the best targeted audience,” he added.

But the tech giant also faces its own challenges on the regulatory front. Last month, the Indian Competition Commission ordered the company to pay penalties of Rs 936.44 billion and Rs 1,337.76 billion in two separate cases for allegedly breaching its dominant position in relation to its Play Store policies and abused the Android mobile operating system.

Google’s competitor Facebook India’s online services had gross advertising revenue of Rs 16,189 billion for FY2021-22, up 74% year-on-year, ET reported last month.

According to a report by TAM Media Research, digital ad insertions increased 109% in the January-June 2022 period compared to the same period last year.

Google India was incorporated on December 16, 2003 as a private company.

Third-quarter results from Google’s parent Alphabet showed that revenue growth had slowed to 6% from 41% a year earlier as the company coped with tough economic conditions in the U.S. and Europe. Alphabet reported total advertising revenue of $54.48 billion for July through September, a slight increase from a year earlier.

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