Margin improvements took a front seat during the company’s earnings calls on Tuesday, as Google and Microsoft independently spoke about integrating generative AI into every aspect of their businesses — especially advertising.

Each company independently tried to ease fears that the massive amounts of changes they are making to products and services will not impact business.

During the Q4 2023 earnings call on Wednesday, Google said it has no plans to replace its advertising sales staff with artificial intelligence (AI), although the company has laid off more than 1,000 employees in the past couple of months.

Philipp Schindler, Google senior vice president and chief business officer, said recent organizational restructurings were geared toward enhancing services.

“We’re not restructuring because AI is taking away roles,” Schindler said during the earnings call. “We see significant opportunities here with our AI-powered solution to actually deliver incredible ROI at scale, and that’s why we’re doing some of those adjustments.”

Mass layoffs at Google sparked discussion across the industry about potentially replacing staff with AI technology, specifically across Google Customer Solutions (GCS) group, a unit within the Global Business Organization that focuses on sales for small and medium sized businesses. Large Customer Sales (LCG) is another unit within the Global Business Organization that focuses on large accounts.

The recent reorganization of Google’s Global Business Organization involved moving some roles from LCS to GCS to ensure the right allocation of resources, according to a spokesperson. There were also some role eliminated in LCS as a part of this change.

Despite the concerns, AI will no doubt become one of the more used buzzword in 2024. 

Google executives mentioned AI more than 62 times during its earnings report on Tuesday, but that also includes names of products such as Google AI and does not include mentions by Analysts and executives during the Q&A session. Add another 23 times on to that trend.

With so many projects tied to AI, analysts were most interested in hurtles and challenges.

Brian Nowak, analyst at Morgan Stanley, asked Schindler to walk through the “pace in which the tools can really be rolled out broadly just so we and advertisers can kind of get an understanding for when they could have a bigger impact on the whole business.”

Although AI has been at the core of Google’s ad products for some time, recent advances have enabled the company to improve bidding, targeting and creative, as well as its core advertiser and publisher experiences, Schindler said.

“We are seeing in core search ads, for example, the bidding side, the value-based bidding as a very significant one on the targeting side, the broad match on creative, responsive search ads automatically created ads assets,” he said, confirming the company is on track with expectations, especially with Google’s ad platform Performance Max. “And we are very happy with the progress we’re seeing in those areas.

AI mentions were not limited to Google. Microsoft executives mentioned AI more than 41 times during its earnings report on Tuesday. That does not include mentions of OpenAI, the maker of ChatGPT, or SymphonyAI, an enterprise company. Analysts and executives during the Q&A session mentioned AI about 29 times.

Margin improvements were a focus as Google and Microsoft independently spoke about integrating generative AI into every aspect of their businesses – especially advertising – on earnings calls. Each company independently tried to ease fears that the huge changes being made to products and services will not impact business.