ARCHIVES: This is legacy content from before Marketing Dive acquired Mobile Marketer in early 2017. Some information, such as publication dates, may not have migrated over. Check out the new Marketing Dive site for the latest marketing news.

Mobile, still king at Google, is poised for boost from machine learning

Google?s results for the fourth quarter beat analysts? expectations, driven by mobile search, YouTube and programmatic advertising, as parent company Alphabet looks to machine learning and artificial intelligence to take mobile to new heights. 

Alphabet?s shares were up 8 percent in late-day trading, with the company briefly more valuable than Apple, despite a 13 percent drop in the cost-per-click. With 60 percent of programmatic video buys for mobile Thanksgiving Week and 10 percent of mobile Inbox responses generated by Smart Reply, Google continues to look for ways to move mobile forward. 

?We have focused a lot on really improving search on mobile and now we are investing in evolving this to actively assist our users throughout the day in smart and helpful ways,? said Sundar Pichai, CEO of Google, during a conference call with analysts to discuss the results.

?This comes thanks to our years of investments in areas like natural language processing, knowledge graph and other areas,? he said. 

?And the next wave will be powered by big advances in machine learning and artificial intelligence.?

Advertising revenue grows
The results marked the first time that Alphabet broke out earnings by segment, with Google continuing to represent the overwhelming majority. 

For the fourth quarter and fiscal year ended Dec. 31, 2015, Alphabet?s consolidated revenue increased 18 percent for a total of $21.3 billion.  

The growth was driven by mobile search, YouTube and programmatic advertising, according to the company. 

Net income totaled $4.9 billion, or $7.06 per diluted share, up from $4.7 billion, or $6.79 per diluted share, a year ago. 

Overall, Google segment revenues totaled $21.2 billion, up 18 percent. 

Advertising also grew 17 percent for a total of $19 billion. 

However, the drop in the aggregate cost-per-click gained steam, losing 13 percent in the fourth quarter. In the previous quarter, CPC?s were down 5 percent. 

Aggregate paid clicks grew 31 percent year-over-year and 17 percent from the previous quarter. 

Other bets
The Google segment includes search, advertising, Play, machine leaning and virtual reality, among other areas. 

Google sites revenue was $14.9 billion in the quarter, up 20 percent year over year. 

The company said that the growth reflects substantial strength in mobile search due to ongoing improvement in ad formats and delivery. 

Google said it also benefited from consumers? greater use of mobile during the holiday shopping season.

YouTube revenue continues to grow briskly, driven by video advertising across TrueView and Google Preferred. 

Network revenue for $4.1 billion, up 7 percent year-over-year, reflecting the strong growth of programmatic offset by the traditional network businesses. 

Alphabet?s Other Bets segment includes ventures such as Nest, Verily, self-driving cars and other areas. For the full year, Other Bet?s revenue was $448 million, up 37 percent for the year. The segment?s operating loss totaled $3.7 billion. 

Smart reply
Google?s Android operating system continues to gain strength across a growing array of devices beyond smartphones and tables, including wearables, cars and living room products, according to the company. 

Other highlights include strong early results for Smart Reply, which generates possible responses to emails for mobile users of Gmail. 

?People absolutely love this feature,? Mr. Pichai said. ?In fact, in just a few months, Smart Reply already makes up 10 percent of mobile responses in Inbox.?

Mobile is the workhorse of Google?s advertising strategy. 

In the fourth quarter, this was evident in how mobile supported consumers? shopping activities during the holiday season. 

?This holiday season, we found that shopping moments replaced shopping marathons,? Mr. Pichai said. ?Shoppers turned to their mobile devices to purchase gifts online in spare moments throughout the day all season long. 

?And marketers turned to our mobile ad offerings to reach those customers,? he said.