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Google Fourth Quarter: CPC Is Down but Clicks Are Up

flipface-h01Type “Google” into the news search and scan today’s headlines. At a glance, it’s hard to tell if Google’s Fourth Quarter and Fiscal Year Results 2013 report was good news or bad news. Google fell short of expectations. Cost Per Click is dropping. Motorola Mobility buy was a failure.

Now for the flip side: analysts expected Google to show a profit of $12.21 a share on revenue of $16.75 billion.

They missed the mark but not by much: $12.01 per share but compared to last year’s $10.65, it’s quite a jump.

Fourth-quarter revenue rose 17% to $16.86 billion. Not bad.

Let’s talk advertising:

Chief Business Officer Nikesh Arora told the press:

Performance advertising continues to be a main stay of our core business. We’re seeing good growth as driven primarily by increased search activity across all screens, as driven by new measurement features and more sophisticated market ears lining their search and display advertising strategies.

Here’s the two sides of the ad coin:

Paid Clicks - Aggregate paid clicks, which include clicks related to ads served on Google sites and the sites of our Network members, increased approximately 31% over the fourth quarter of 2012 and increased approximately 13% over the third quarter of 2013.

Cost-Per-Click – Average cost-per-click, which includes clicks related to ads served on Google sites and the sites of our Network members, decreased approximately 11% over the fourth quarter of 2012 and decreased approximately 2% over the third quarter of 2013.

This means advertisers are paying less but more people are clicking ads. That works. And a 31% increase in clicks quarter-over-quarter? Why are people crying about the sky falling?

The one area where Google did make a mistake was in buying Motorola Mobility. This branch of the biz lost $384 million in the fourth quarter so they sold the works to Lenovo for $2.91 billion. Really, Google is bigger than the smartphone biz. They need to pour those dollars and resources into more cool and wondrous things.

On a conference call, Nikesh Arora said advertisers are looking at this whole mobile thing the wrong way, anyway.

“People aren’t distinguishing what they’re doing on different screens, so advertisers should be more agnostic about where they reach the user. The fundamental tenet is not to speak about mobile, mobile, mobile. It’s really about living with the users. What device are you on? What’s your question? How can we assist you? That’s a much broader and richer set of activities for us.”

It’s no longer about creating a great web experience and a great smartphone experience. It’s about creating an experience customers can access when and how they need to. That could mean a PC, a tablet or blink instructions via Google Glass.

I don’t know about you, but I’ll sleep better tonight knowing that Google is doing A-OK.

Psst…have a bunch of good news / bad news people at your office. Put Mr. Flip-Face on your desk.

  • dean jackson

    Keyword relevancy is one of the keys to success with Google AdWords. While it may be tempting to include all sorts of keywords you can get your hands on, be aware that this is often the #1 mistake advertisers make when creating their first campaign. You only want prospects who “Need You Now” and are going to be motivated to contact your company, or purchase your services if they click your ad. People bid on the wrong keywords all the time and it hurts them big time. My company was losing an average of $0.67 per click until Simon over at RDM (his email is simon.b@resultsdriven.org) helped us get our ducks in a row with the campaign and now it makes $2.19 per click on average instead of -$0.67. If you speak with him let him know your a friend of Dean Jackson.