Google Earnings Show Halt Of CPC Decline, At Least Temporarily

One of the closest-watched metrics by marketers and investors — the cost-per-click across Google’s advertising business — increased approximately 2% in the fourth quarter, as compared to the third quarter, after several consecutive quarters of decline. The company released the figure as it announced revenues of $14.4 billion in the usually-busy fourth quarter.

The fourth quarter average CPC was still down — approximately 6% — as compared to the same period last year, but, given recent quarters, any upward movement in CPC is noteworthy. A recent report from Adobe indicated that the company’s paid search division saw a CPC rise in Q4.

The company has reported declining CPCs — save a 2Q 2012 1% rise over the first quarter — since the third quarter of 2011.

Google has managed to keep revenues high, however, by growing the number of paid clicks. Aggregate paid clicks, across both Google and partner sites, grew 24% year-over-year and came in 9% higher than the previous quarter.

Of interest, especially to network partners, is the amount of advertising revenues paid out to those other publishers, or traffic acquisition costs. In the fourth quarter, Google said, this totaled $3.08 billion, or 25% of what Google brought in from advertising. Those partner sites helped Google generate revenues of $3.44 billion, or 27% of total revenues. That’s grown 19% since the fourth quarter last year.


Google-owned sites brought in 67% of total revenue, or $8.64 billion. This figure was up 18% over the year-ago number.

Other revenues came in at $829 million, or 6% of total Google revenues. Last year, the company only made “other revenues” of $410 million, so it’s grown that part of the business 102%.

Related Topics: Channel: SEM | Google | Google: AdWords | Google: Business Issues | Top News


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  • MonopolizedSearch

    This is actually good news. It appears Google has disavowed enough webmasters/seos that marketing budgets for Google are being reigned back in. I hope the CPC continues to decline just as quickly as Google has shunned small businesses in favor of Amazon and the other corporate heavyweights that are part of Google’s Internet Association.

  • Fabian Linge

    It’ll be interesting to see how the CPC will change in the near future. After this massive increase in the last couple of years I’d happy to see the costs go down.
    Guess we will find out shortly :-)

  • mary li

    wow, you did a good job, your post is useful for SEO newbie, thanks for sharing, hope you enjoy fun with runescape account

  • Abdul Wahab

    For SEO newbie of Adwords/PPC newbie?? :-O

  • Abdul Wahab

    hahaha… as a SEO its our selfishness, we got happy to know google adwords gone little bit down :-) .. . But yes we all happy as Google discouraging more and more SEO

  • Rick Noel, eBiz ROI, Inc.

    CPC is market-driven so stabilization means that demand must be increasing since we know supply is increasing, which is usually negatively correlated with CPC (more supply means falling CPC). This increase in demand is supported by an increase aggregate clicks YoY. The key for ROI is effective PPC campaign management.

  • Pat Grady

    Very good news, I own a ton of GOOG. :-)

  • Claudiu Fărcaș

    I really think that it’s normal that the Average CPC to decrease while the number of clicks are rising faster than the conversion values.

  • David Iwanow

    I’m wondering if tablet monetisation is not proving as successful for Google even with the rise in CPC described in the Adobe report brining them closer to desktop CPC rates.

    Seeing that publisher partners are generating close to 27% of total revenues I think part of the drop is the shift to tablet from desktop. I see/hear that mobile traffic still doesn’t earn as much as you would from a desktop visitor with Adsense.

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