Google Admits Crypto Winter Is Hurting Ad Business

The digital asset market downturn that started the current crypto winter is negatively affecting search spending, Google has acknowledged. Ad growth in the third quarter fell to a low seen only once in almost a decade, the tech company revealed this week.

With Fewer Crypto Ads, Google Registers 6% Ad Revenue Growth in Last Quarter

Online advertising giant Google has partially blamed a slowdown in revenue growth on decreasing ad spending by financial firms, including those working with crypto assets. During parent company Alphabet’s earnings call on Tuesday, Google’s Chief Business Officer Philipp Schindler admitted to witnessing reduced search spending during the third-quarter and elaborated:

For example in financial services, we saw a pullback in the insurance, loan, mortgage, and crypto subcategories.

In a report quoting the executive, CNBC noted that the with an overall ad growth of 6%, the three-month period was Google’s weakest among all quarters since 2013, with only one exception, at the beginning of the Covid-19 pandemic.

Youtube’s ad revenue also shrank on annual basis, with Google CEO Sundar Pichai referring to the challenging macro climate’s impact on the ad business.

Major cryptocurrencies like bitcoin (BCH) and ethereum (ETH) lost nearly 60% of their value in 2022, compared to their all-time highs. The crypto industry has since seen a string of bankruptcies of hedge funds and lenders, including Celsius Network, Voyager Digital, and Three Arrows Capital, as well as downsizing in companies such as Blockchain.com and Crypto.com.

Leading U.S. cryptocurrency exchange Coinbase cut its workforce by 18% and its stock is down 70% this year, after the company went public in 2021. Google announced a partnership with the crypto trading platform in the third quarter of this year.

Earlier in October, Google unveiled it will rely on Coinbase to allow customers to pay for its cloud services with cryptocurrencies in 2023, an indication of the tech giant’s hopes that the crypto winter will be short. Coinbase is also expected to move data-related applications to Google’s cloud infrastructure.