After a recent ComScore report indicated that the paid click rates for Google AdSense had dropped 12% year-over-year, and 7% from last December, Google felt the need to comment. According to Google, the decline is intentional and due to some quality initiatives that the company has taken. Not surprisingly efforts to reduce click fraud and other accidental clicks have affected the company’s stock price.
Speaking recently at the Bear Stearns Media Conference in Florida, Tim Armstrong, Google’s president of North American advertising and commerce, said that the recent decline in paid clicks “was intentional on our part”, and would result in “a long-term benefit for our business”.
Initiatives to reduce accidential clicks, such as changing the clickable area of the ad to include only the title and URL, as opposed to the entire ad area, have resulted in fewer clicks. However, in theory, this should result in a higher number of conversions, as well as increase the advertisers return on investment.
Perusing the various big webmaster forums, I’ve noticed more than a few threads about the drop in clicks and earnings, and publishers are understandably concerned. Although it may take some time, hopefully when advertisers have more confidence in their online advertising investments, they’ll be willing to put more money in their advertising campaigns, and be willing to bid more for desirable keywords. This, in turn, could help turn things around for publishers as well.
Similarly, stock holders are also less than thrilled, which is evidenced by a nearly 15% drop in share prices since the publication of the ComScore report. Similar to the plight of publishers, while revenues might decrease in the short-term, the hope is that in the long-term things could turn in their favor.