Google Cost-Per-Click Fell— Again

Google reported earnings yesterday and for the fifth quarter in a row cost-per-click declined, in year-over-year terms. 

The CPC for the fourth quarter was down 6 per cent compared to the same quarter a year prior, but it was up 2 per cent compared to the third quarter, indicating that the free-fall in Google’s CPC may have stabilised.

The drop in Google’s CPCs is due to a flood of queries from mobile devices. Google owns the mobile search market, but mobile CPCs remain lower than those on the desktop.

Mobile has emerged as a major new revenue stream for Google. However, as Henry Blodget has pointed out, the amount of revenue is really a function of how much Google searcher’s spend with its advertising partners, not the total volume of clicks.

Broadly speaking, most consumers won’t spend more money just because of increased access to Google search via mobile. There are also some doubts about whether mobile searches translate into post-click sales revenue for advertisers to the same extent as desktop searches do. Thus, mobile has resulted in a CPC slump that Google has yet to reverse.      

Click here for more on Google’s CPC problem→

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