Google released its Q1 earnings report on Thursday, which included another quarter of decline in cost-per-click, an area which has drawn concern from shareholders and analysts since this happened last quarter. In Q4, the decline was 8%. This time it was 12% (year-over-year).
There has been lot of concern with mobile in particular. People are searching with Google using mobile devices more than ever, but the CPCs have not been as good as for desktop.
"I see this as less of a shifting market and more as an expanded opportunity to reach consumers," Brian Kaminski, COO of digital agency iProspect, tells WebProNews, regarding what CPC means for advertisers in an increasingly mobile market.
"Most of mobile queries are either incremental or with different intentions than desktop," he adds. "The growing mobile market means that consumers will be looking for information,products and comparisons in a number of different places only underscoring the need to be present, competitive and consumer focused."
Google CEO Larry Page discussed this in the company's earnings call, saying he's "very, very bullish" in the mobile CPC department, suggesting that things are looking rather positive for the long term.
Mobile is "exploding in query growth," Page said, adding that the formats are just adapting a lot from a "relatively crude base."
"Right now, they don't monetize well," Page said, comparing it to how desktop search was in 2002 and 2003. People always spend most of their efforts on the major source of traffic, which is desktop, he said. But over time that will reverse, and CPCs may actually get better, he said.
"In addition to CPC spending within Mobile, the growth of investments made in Mobile Display has increased," Kaminski tells us. "Additionally, when speaking of mobile, Tablet usage is generally lumped into 'mobile'. The experience on a tablet is similar to a desktop in terms of display, along with how consumers are leveraging tablets – in the evening and for shopping. This has provided another opportunity for advertisers to leverage display in order to grow their businesses."
Page indicated that Google is investing heavily in areas that could eventually make mobile CPCs better. He cited Google Offers and Google Wallet as things that could have a significant impact, as the company works to integrate its various products in more ways.
Nikesh Arora, Google's Chief Business Officer, made the following point during the call: Advertisers are only interested in ROI. They're not as interested in whether it's coming from mobile vs. desktop or other means. Google, he says, is working to dynamically allocate across different channels to help advertisers maximize ROI.