Google Earnings: Q1 Revenue Rises And Paid Clicks Up 20% Though CPC Slips 4% YoY

Google announced their Q1 2013 earnings today, and as many analysts expected, the company posted revenue gains over the previous year. Revenue rose  31% year-over-year  to $13.97  billion for the quarter, beating expectations.

Here are the highlights:

Paid Clicks — Aggregate paid clicks, which include ad clicks on Google sites and Google Content Network sites rose 20% year-over-year and 3% over Q4 2012.

Google Sites — Google-owned sites generated $8.64 billion, an 18% increase year-over-year of $7.31 billion. Revenues were flat quarter-over-quarter.

Google Network — Google partner sites generated $3.26 billion in revenue from AdSense, representing 25% of total revenues. That’s a 12% increase from Q1 2012 revenues of $2.91 billion.

Other Revenues were $1.05 billion, which constitute 8% of total revenues. This is a 150% increase year-over-year from $420 million

Traffic Acquisition Costs (TAC), which is the portion of revenue shared with Google partners, totaled 25% of advertising revenues, as it did in Q1 2012. TAC rose from $2.51 billion to $2.96 billion year-over-year. The majority of TAC costs continue to come from AdSense partners, which totaled $2.28 billion in Q1.

CPC — After a 2% increase in Q4 from Q3, cost-per-click  fell approximately 4% both year-over-year and quarter-over-quarter.

Enhanced Campaigns — When asked on the earnings call about whether Google expects to see any bumps related to the transition to enhanced campaigns, Nikesh Arora, SVP and Chief Business Officer, said the company has already seen more than 1.5 million campaigns migrate from legacy to enhanced and “so far the feedback we’ve gotten from advertisers is very positive because basically it takes a lot of work away from them. We also have some great suggestions from our advertisers on ways to make it better, and we’re beginning to implement those.” One example is likely the April 9th announcement to add ad group-level mobile bidding to enhanced campaigns.

And in the food for thought realm, in response to a question on how the company expects to generate revenue from voice-activated search tools, CEO Larry Page said,

“I’m not worried about that at all. The reason we’ve been successful at advertising is because we view that as another source of information. The search ad we show has to be very relevant and make sense to you at that moment … The better job we can do of providing you information, even without you asking for it, the better we can also provide commercial information to you … That’s actually a huge, huge opportunity for us.

After closing down 2.13% for the day, Google’s stock is up in after hours trading.