For the second month in a row, comScore says that Google AdWords spending is slowing down and its advertising growth is low, especially compared to a year ago.
Clicks on Google’s sponsored links — four-line ads that mostly run alongside search results — rose 3 percent to 515 million in February from a year earlier, researcher ComScore Inc. said today. In January, Google had no growth, after a 25 percent increase in the fourth quarter.
Ad clicks fell 3 percent in February from the previous month, Reston, Virginia-based ComScore said. In January, clicks fell 7.5 percent to 532 million from the previous month.
Comscore issued a similar report at the end of last month, which resulted in a downward spiral of Google stock value, then Magid Abraham of comScore issued an explanation on the comScore blog.
Seems that Google’s own quality efforts may be effecting the ad spend growth :
As we looked deeper into our data, we found much stronger support for what some industry observers have hypothesized regarding the impact of Googles own quality efforts on the negative trends in their paid clicks. Because of this, we felt we needed to set the record straight on two counts:
- Our data did not support the conclusions that were being incorrectly attributed to us
- The number of paid search clicks is only one driver of revenue for a search engine. Pricing is also a critical component and, as later confirmed publicly by Google executives, one that turns out to be closely related to Googles quality efforts, since these efforts affect minimum bid prices and overall supply / demand.
Sure some of this has to do with Google quality control, but mixed with an American economic crisis, devaluation of the dollar, oil being traded on the euro and big spenders like real estate and mortgage advertisers folding, Yahoo and Ask laying off percentages of their workforce; one has to wonder if these numbers reflect not only internal Google advertising changes, but also reflect the economy and global spending as a whole.
Guess we will all have to wait for the Google Q1 earnings reports.
Unfortunately, there is no data given about the organic SERPs to make a comparison.
To fully understand what is going on, one needs to compare the same consumers’ clicks on the organic SERPS during the same sessions.
If the clicks on the organics have risen – then consumers are just skipping the PPCs and going to the relevant natural listings.
If both the sponsor links AND the organics are declining, then it could be less overall spending due to the economy.
But we have to know everything the users are doing on the SERPs during that one visit, not just whether or not they are ignoring the PPCs at a higher rate.
Perhaps as consumers are getting more search savvy, they use the regular results first and skip the adwords.
The organic results should be better than the PPCs because these firms have worked for years to get to that point. If there listings were not relevant, they would have been reported by competitors or discovered by the Google spam team.
So maybe as consumers become more experienced searchers, they are more inclined to use the organics first and generally get what they want on the first page.
As the owner of a real estate company doing PPC in a couple markets as well as having good organic positioning there is now a challenge of converting the leads that are generated because of the current economy and the housing market all the way around. Certainly PPC in the real estate space will be down just because there are a lower number of consumers searching then a few years ago however I also see businesses in the real estate and mortgage space cutting back PPC expenditures even further along with all other media until the market “hits bottom”.
It may also be a case of reducing the amount one is willing to spend per click as well.