Posted April 16, 2008 10:39 am by with 10 comments

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UPDATE: Google’s Q1 numbers are out, and it grew paid clicks by 20%. So, yes, comScore is the boy that cried wolf. Or is it?

Yesterday we asked if Google’s Q1 would be a “hit” or “miss” and offered numbers from comScore which suggested the news might actually be good.

OK, scrap that.

comScore has now released the “paid click” data for March and, according to the WSJ, it’s not looking good for Thursday’s quarterly report (emphasis added):

The March data from research group comScore Inc., released late Tuesday, marked the third-straight month that Google’s paid clicks, the source of nearly all of its revenue, has disappointed analysts.

ComScore said Google’s U.S. paid clicks grew 2.7% in March compared with the same month last year. That meant Google’s U.S. paid clicks for the first quarter grew just 1.8% compared with the year-earlier period, a sharp deceleration from the company’s 25% growth rate in fourth quarter and 48% growth in the third quarter.

It now almost feels like a foot race between Google and comScore with the winner earning credibility. If Google’s Q1 numbers suck, comScore will be the “go to” company for web metrics. If Google knocks it out of the park, then comScore becomes the fabled boy that cried wolf.

  • Dean

    The deceleration of growth while disappointing also reflects two undeniable facts:

    1. The recession..errrr…economic slowdown has a broad impact that will effect even the mighty Google.

    2. You CAN’T grow at 25% and 48% ad infinitum – mathematics just doesn’t works that way 😉

    So, Google will get hammered by not meeting unrealistic Wall Street expectations, their numbers will continue to slow down as economics and mathematics play their part and most importantly, I will not have to eat my shoe……ever.(

  • @Dean – lol, but you did say “ever” – that’s a long time and with inflation and no stock split in site, we could be holding your “shoe eating” party at some point in the next 10 years. I’ll bring the ketchup! 😉

  • Wes

    Both could be accurate. From my understanding comScore says the number of paid clicks have decreased. However, the average revenue per click Google received may have increased. Google has decreased the number of low quality clicks, which are most likely clicks for pennies. Additionally, the price for commerce related search queries seems to have increased, from various surveys of PPC management firms. Furthermore, there have been a chorus of adsense publishers that claim a decrease in revenue, driving speculation that Google is increasing their share of the revenue on adsense sites.
    I know the last part is true because we have done a adword’s site campaign on many sites. In one instance, we found page that converted very well for us, so we made sure we were the only advertiser on that page. We entered into discussions for a direct link and discovered while our advertising costs remained the same, the publisher’s side showed a significant decrease in revenue this past month per thousand impressions, as measured by a adsense channel they setup. It is highly unlikely they were ‘smart priced’ as the conversion rate held constant and it was a cpm buy. The simplest answer to the data: Google taking a larger piece of the adsense pie.

  • Not meeting analyst expectations doesn’t seem too far fetched. Our economy is slowing and advertisers are probably holding on to more of their money, not to mention some analysts seem to expect too much from Google (probably for good reason).

    I know that in the markets we serve, it looks like there are less real estate companies advertising and they aren’t advertising as much as they were 6 months – a year ago. Things could be just trickling down –

  • Like your take on this issue, Wes. There is still positive growth too, so the bottom line would be to have a look-see at what revenue Google was deriving from adwords billing. Thye company is hardly in trouble or out of cash, but the exponential growth is something of the past.

  • PS3

    Maybe the increase is due to unemployed workers randomly clicking ads to while away their time during the “credit crunch” (pending repossession)?

  • Any growth right now seems like a good thing to me.

  • Surprisingly, Google paid click grew only 1.8%…But, I still think comScore must work very hard to make Google cry. This year first quarter increasement does not representate the whole performance.

  • Good points Dean.

    It’s funny to watch people buy and sell stocks not based on real numbers, but comparison of the real numbers to an arbitrary prediction.

    What Google revenue only rose 43%? You said it would be 44%. We better dump all our stock.

    Andy it will be interesting to see how well the Compete data compares, though the positive or negative reaction will probably only last until the next time we can compare.

    Steven Bradley’s last blog post..Last Chance To Join Teaching Sells For $1

  • James

    AdGooroo just released their quarterly research report on Google and Yahoo. It clearly shows that Google’s quality algorithm cost them quite a few advertisers since July, but that they bounced back in Q1 (at Yahoo’s expense). This seems to support the idea that earnings will be up.

    These guys normally know what they are talking about, so we will see…