Google executives respond to sales team reorganization: not because jobs are to be replaced by AI, but 'portfolio adjustment'

Alphabet (Google’s parent company) today released the company’s fourth quarter and full-year financial results for fiscal 2023 ended December 31.

The report shows that Alphabet’s total revenue in the fourth quarter was US$86.31 billion, a year-on-year increase of 13%. Excluding the impact of exchange rate changes, it also increased by 13% year-on-year. According to U.S. GAAP, Alphabet’s fourth-quarter revenue Net profit was US$20.687 billion, compared with US$13.624 billion in the same period last year, a year-on-year increase of 52%.

After the financial report was released, Google CEO Sundar Pichai, President, Chief Investment Officer and CFO Ruth Porat and Chief Commercial Officer Philip Schindler Philipp Schindler held an analyst conference call to answer questions about the business.

The following is a summary of analysts’ conference call answers:

Morgan Stanley analyst Brian Nowak:I have two questions for Philip. My first question is about the many new generative AI advertising tools Google is rolling out. Obviously, the company can be said to be taking a "multi-pronged approach" at present, and is even discussing and sharing early trends with tens of thousands of cooperative advertisers. My question is, if we want to further promote these generative artificial intelligence advertising tools, can we ask management to analyze for us what are the obstacles and limitations that need to be considered and solved? When will these generative AI advertising tools have a larger impact on the overall advertising business?

My second question is: In the long term, as more and more artificial intelligence advertising (such as performance maximization advertising Pmax) gradually affects the overall advertising allocation, how does management view Google's advertising business? sales team?

Philip Schindler: Regarding your first question, I have actually talked about this issue in conference calls in previous quarters.

Artificial intelligence has been a core support of Google’s advertising products for a long time, and the recent progress we have made in this area can indeed bring more value to advertisers in different areas of the company, such as in ad bidding. , targeting groups, advertising creativity and advertiser experience, we can bring more positive feedback to advertisers. This can be seen in the company's core search advertising business.

For example, in terms of ad bidding, we can provide value-based bidding services for advertisers, which is crucial; in terms of ad targeting groups, we can help advertisers achieve broad matching; In terms of advertising creativity, such as responsive search ads (Responsive Search Ads), we can automatically create advertising assets. We are very pleased and excited about the progress we have made in these areas.

In a previous conference call, an analyst mentioned the obstacles and constraints we face. The key, in my opinion, is that we need to ensure that everyone, every user, can truly take full advantage of these AI tools. We have also shared with you the progress of Pmax advertising before, and we are very satisfied with the performance of Pmax in the fourth quarter.

All in all, I think everything is on track and we are gradually achieving the company's expectations.

Regarding your second question, that is our sales team. We did make some business changes, or what I like to call "portfolio changes," to our ad sales team across the company.

As we all know, there are two different large advertising business teams within Google: The first is our LCS team (Large Customer Solutions Team), which is the large account sales department. This team focuses on serving the company’s large and mature customers. Achieve transformation and growth; the other team is our GCS team (Global Customer Solutions Team), the Global Customer Solutions Department, where every Google customer’s business begins, from the largest customers to millions of small customers , small and medium enterprises. The GCS team aims to provide every Google customer with the right solution to truly grow. The latter is also one of the company's fastest-growing channels, and particularly in the fourth quarter, the GCS team saw very strong growth.

Therefore, We chose to focus more resources on the GCS team through business adjustments. But I also want to make it clear here that the main reason why we chose to restructure our business is to provide users with more efficient and intelligent services, not because artificial intelligence is replacing related jobs. But it is undeniable that artificial intelligence-driven solutions do bring us greater opportunities and can bring us larger, even incredible, return on investment (ROI).

It is based on the above considerations that we chose to adjust the company's sales staff team. In the future, we will also pay more attention to the sales staff team in the above channels.

Related reading:

"Google is exposed to another major layoff: 30,000 employees face being replaced by AI"

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