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%.

About The Author

Pamela Parker

Pamela Parker is Research Director at Third Door Media's Content Studio, where she produces MarTech Intelligence Reports and other in-depth content for digital marketers in conjunction with Search Engine Land and MarTech. Prior to taking on this role at TDM, she served as Content Manager, Senior Editor and Executive Features Editor. Parker is a well-respected authority on digital marketing, having reported and written on the subject since its beginning. She's a former managing editor of ClickZ and has also worked on the business side helping independent publishers monetize their sites at Federated Media Publishing. Parker earned a master's degree in journalism from Columbia University.