comScore Paid Search Data & How The Sky Might Not Be Falling

Last week comScore came out with a report that showed a 7% sequential decline vs. December 2007 in paid search ad clicks. Plus, they showed an 8% drop in the number of clicks per Google searcher from December 2007. The report set shock-waves through Wall Street and caused the stock to drop and drove concerns about a recession.

James Lamberti of comScore spoke about the concerns on the Searchscape panel at SMX West. He expressed that after careful analysis, the data does not directly support evidence of a recession or a weaker Google.

Why Google’s surprising paid click data are less surprising from comScore addresses much of the concern. comScore explains that the drop in paid clicks was not due to advertisers holding back on spending but rather Google’s “quality initiatives.” In order for Google to gain more market share, they want to drive more quality. In the short term, it might lead to less revenue but in the long term, Google’s share will increase and revenue will increase with that.

SEO Blackhat shares why comScore’s Google clicks are flat, while Google CTR Down Due To Click Area Changes from TechCrunch makes me want to kick myself. Why? This article makes me think, “Why didn’t I think of that!” Google changed the clickable area for their search sponsored ads in April 2007, but in mid- November they changed the clickable area for AdSense ads. A possible reason for less paid clicks can be due to the fact that a lot of the clicks on AdSense ads were accidental. It kind of supports what I have seen, where most AdSense publishers are earning less than they ever have in the past with Google.

Feb ’08 Paid Search Market Share: Google Gains, Yahoo Loses, Economic Slowdown Not Observed from Rimm Kaufamn says he hasn’t seen a drop in paid search activity with his clients. It seems like maybe they don’t advertise on the contextual network, which is possible.

In summary, the comScore data was never meant to hint at signs of Google falling apart or of an economic recession. It seems like Wall Street jumped on the news without fully understanding the data.