Digital Ad Report: Google Hitting Plateau on Search, Feeling Heat From Facebook

The cash cow has grown so fat that it can barely inch forward. That, more or less, is the state of Google’s search ad business. Its growth has almost flatlined, as marketers shift spending to mobile and other digital ad vehicles, per the quarterly Adobe Digital Index out July 15. Google reports its second quarter earnings on July 16. Adobe backs out the numbers for its survey (since Google doesn’t give them) from around 900 billion search and social ad impressions. By its count, growth in Google’s search revenue drops in the red in the first quarter, after a holiday surge, then returns in Q2. Adobe estimated the business ticked up 4.5 percent quarterly in 2014; for this quarter, Adobe expects it to expand by only 1 percent to 2 percent.

The punier search engines, Bing and Yahoo, are projected to grow at higher rates this quarter. Google’s loss is likely coming from its long tail of small advertisers, who are angling for better returns, said Adobe’s Tamara Gaffney, the report’s principal analyst. “For a lot of marketers, the next best place to spend their dollars is to go outside of Google,” she said.