Philipp Schindler
Senior Vice President and Chief Business Officer at Alphabet
Thanks, Sundar, and hello, everyone. It's great to be joining you all today. Google Services revenues of $61 billion were up 2% year on year, negatively affected by sizable foreign exchange headwind. Search and other revenues grew 4% year over year to $40 billion, led by travel and retail, while both YouTube Ads and Network had modest year-over-year revenue declines. Other revenues were up 2% year over year with growth in YouTube, non-advertising and hardware revenues offset by a decrease in Play revenues. Play revenues were lower due to a number of factors, including a decline in user engagement in gaming from the elevated levels seen earlier in the pandemic. Among other factors, this shift in user behavior also created downward pressure on our advertising revenues, with lower revenues from app [Phonetic] promo spend on YouTube, Network and Play ads in Search and Other. I'll highlight a couple of other trends that affected our ads business in Q3 and Ruth will provide more detail.
On the second quarter earnings call, we noted a pullback in spend by some advertisers in YouTube and Network, and these pullbacks in spend increased in the third quarter. In Search and Other, the largest factor in the deceleration in Q3 was lapping the outsized performance in 2021. In the third quarter, we did see a pullback in spent by some advertisers in certain areas in Search ads. For example, in financial services, we saw a pullback in the insurance, loan, mortgage, and crypto subcategories.
There's no question we're operating in an uncertain environment, and that businesses big and small continue to get tested in new and different ways depending on where they are in the world. When it comes to how we're helping, our focus remains unchanged. The same AI driving breakthroughs in everything from protein-folding, flood forecasting, and language understanding is also fueling innovation across our ads products. Via insights, automation, and easier-to-use advertising tools and formats, we're helping businesses stay agile, build resilience, anticipate the future, and show up for customers in more connected, visual, and consistent ways. We're helping them understand demand, deal with inventory challenges, increase loyalty, and much more.
In challenging times like these, advertisers are carefully evaluating the effectiveness of their budgets. Search tends to do relatively well in such an environment, given its strong measurability and focus on delivering ROI. It's also well suited to quickly adjust the changes in consumer behavior. And when search is coupled with our automation products across Bidding, creatives, targeting, or Performance Max, it can drive performance even further.
Let's talk retail, an important vertical for us. No matter where shoppers are buying, whether it's in store, online, or both, we have the solutions to help them deliver results wherever their customers are. Take online fashion retailer REVOLVE, who used its global influencer network along with our category insights and automated tools to acquire new customers at lower costs. As festivals and events returned this summer, REVOLVE used lower funnel solutions across search and shopping to engage with consumers in high-demand apparel categories, helping it cross $1 billion in trailing 12-month net sales for the first time.
And then there's Magazine Luiza, a large Brazilian retailer who embraced omnichannel by measuring and bidding directly to store sales. Coupled with in-store pickup annotations via PMax, Magazine Luiza drove a 38% ROACE over 30 days and has since expanded the strategy to all eligible products, including 8 million plus new offers. And whether shoppers know exactly what they're looking for or are just seeking inspiration, we're innovating to make it easier and more engaging for people to shop online across our surfaces. From finding the best deals across all types of merchants, including 200 million plus available daily deals in Q3 to new ways to search. Now when you type shop, followed by whatever item you're looking for, you'll unlock a visual content stream of ideas that feel just like window shopping, but online.
And then there's YouTube. Not only can users now buy more products in videos, but shopping-as-entertainment experiences are bringing the magic of our creators to the shopping experience. Like in September when Kylie and Kris Jenner hosted an exclusive shopping stream event to celebrate the debut of a new Kris Collection for Kylie Cosmetics. And at Adweek last week, not only did we announce that product feeds are coming to discovery, but their creators will soon be able to tag products from brands across their videos, Shorts, and live streams. This means viewers can shop products seamlessly while they watch their favorite content, while merchants can drive incremental reach and engagement for free listing offers when tagged by creators that viewers love and trust.
I already touched on YouTube's performance in the quarter. Let's deep dive into what we're focused on. First, we're helping advertisers understand how they can drive effectiveness with every campaign they run on YouTube. Full funnel is a key way to do this. Buying YouTube across consideration, awareness, and action allows marketers to meet customers at different stages in their purchasing journey, which we know are increasingly complex while delivering towards a key business goal.
Creative and media work together across the funnel to create new demand and convert current demand. Castlery, a Singapore furniture retailer, activated a full-funnel approach as part of its U.S. expansion. It used brand and action formats, identified its most relevant audiences, and built a robust measurement framework to boost sales and awareness, including a 65% increase in U.S. brand searches. Castlery is using the same strategy for the upcoming holiday season.
Two other areas where we're continuing to invest: Connected TV and Shorts. First, on CTV. Eyeballs keep moving away from traditional TV. On average, global viewers are watching 700 million plus hours of YouTube content on TV daily. And according to Nielsen, during the 2021-2022 U.S. broadcast seasons, YouTube reached more viewers during primetime on CTV than any linear TV network. Brands continue to take notice. Like Instacart, who tapped into CTV to maximize its TV screen strategy for its The World is Your Cart brand campaign featuring Lizzo. It drove breakout searches for its product and above average brand lift across awareness, consideration, and purchase intent. And it also engaged a significant increase in audience on top of TV with 66% lower CPMs.
And then there's Shorts, 1.5 billion users every month, 30 billion daily views. Engagement is strong. We've always said that we focus on building great user and creator experiences first, and then follow that with monetization over time. As of September, ads on Shorts have officially launched via Video Action app and Performance Max campaigns. As Sundar mentioned, we also extended the YouTube Partner Program and announced our revenue sharing model for Shorts creators, the first of its kind for short-form content. It's early, but we're encouraged by the progress we've made this year in Shorts monetization and support for sustaining the creator ecosystem.
I'll close with something I've said before, and I think it's worth reiterating. Our success is only possible when our customers and partners succeed. Whether it's helping individual YouTube creators or Play developers make a living and build thriving businesses, or bringing the best across Google to our partners, our focus on driving growth for our partners and key ecosystems remains steadfast. I'm proud that over the past three years we've paid creators, artists, and media companies over $50 billion.
In terms of how we're helping our partners innovate, I'll share two highlights. First, a transformative partnership with Transsion, the number one OEM in Africa and Pakistan, will help it close the digital divide by doubling annual activations by 2025 and build helpful products for the next billion users. And then in commerce, with FEMSA Digital in Mexico, we're bringing together solutions across Ads, Cloud, Maps, Waze, and beyond to bolster its data and analytics capabilities so it can better reach and retain its beverage and retail customers.
On behalf of many, a massive thank you to our customers and partners for their collaboration, trust, and feedback, and another massive thank you to our sales, partnerships, product, engineering, and support teams. The hard work, dedication, and ingenuity of Googlers, especially during more challenging times, is truly second to none.
On that note, over to you, Ruth.
