Anyone who’s been looking at the macroeconomic picture lately is probably thinking that digital advertising is likely to fall on a lot of deaf ears right now. Or eyes, whichever. But that’s not the prevailing thought right now, it seems, and Alphabet (NASDAQ:GOOG) gained fractionally in the closing minutes of Monday’s trading session as a result.
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The word from Roth MKM—via analyst Rohit Kulkarni—suggested that the freeze in advertising spending may only have been temporary after all, and while October was quiet, there are signs that November picked up substantially. It was good news for Google, certainly, and others like Meta Platforms (NASDAQ:META) and TikTok also saw some gains. Pinterest (NYSE:PINS), however, suffered a bit, as Kulkarni said its market share either remained flat or fell. Some of this is due to “earlier holiday-season offers,” reports note, but a resurgence in digital advertising is still a step up from what it was.
Operational Issues Plague Google
Yet, even as Google is seeing a return of advertiser interest, it’s coming at something of a bad time, as operational issues plague the digital media giant. One of the biggest problems came from an internal bug, which sent messages to a range of advertisers informing them, erroneously, that their Google Ads accounts had been suspended. Google told those affected to simply ignore the message, but that likely didn’t help matters much.
Meanwhile, Google is also in the midst of an ongoing war over adblockers on YouTube. YouTube viewers, concerned about YouTube’s increasing advertising frequency, have prompted more adblocker technology, which YouTube is frantically fighting, perhaps to its own detriment. With the Brave and Firefox browsers already planning workarounds, Google’s ad-blocker fight may not work as planned.
Is Google a Good Stock to Hold?
Turning to Wall Street, analysts have a Strong Buy consensus rating on GOOG stock based on four Buys and one Hold assigned in the past three months, as indicated by the graphic below. After a 43.68% rally in its share price over the past year, the average GOOG price target of $152 per share implies 10.03% downside risk.
