Google's paid clicks anemic in March; Will it matter?

Google's paid click rate for March grew 2.7 percent in March, a tally that was deemed "anemic" by analysts.

Google's paid clicks have been the most overanalyzed metric of the first quarter, but we're about to find out whether they matter since the search giant reports earnings on Thursday.

According to comScore, via a bevy of Wall Street research reports, Google's paid clicks were 582 million in March, up 2.7 percent (Techmeme). For those keeping score at home, Google had paid click growth of 3.1 percent in February and a decline of 0.3 percent in January. For the quarter, paid clicks were up 1.8 percent, which is a major deceleration from 25 percent growth in the fourth quarter and 48 percent in the third quarter.

Google maintains it is improving the quality of leads, but folks are clearly spooked.

Citigroup analyst Mark Mahaney says:

Assuming the data is  accurate,  we could see two factors behind the Coverage Ratio decline: 1. Google's ongoing efforts to improve both lead quality for advertisers and the user experience for searches. 2. A  macroeconomic  dampening  of  commercial  queries  by searchers.

Door No. 2 is what has people worried.

This paid click concern has set up something I'm not sure has ever happened in Google's history as a public company: Expectations for the company's earnings report are low, says William Blair analyst Troy Mastin. He cited currency gains as one buffer along with international growth for Google. Meanwhile, Google may have actually improved leads for the company.

Thomas Weisel analyst Christa Quarles makes another interesting point:

In an effort to account for Google’s decision to reduce ad coverage, comScore recently began reporting a new data set to include not only paid clicks, but overall clicks on Google’s sites. Total clicks (includes organic and paid) were up 26% y/y indicating Google's audience ratings remain strong relative to competitors that are choosing to monetize more aggressively.

At this juncture, I'd say that folks are guessing about Google's paid clicks and the impact they have on earnings. We'll know more tomorrow when Google reports its first quarter results. Analysts are expecting Google to report earnings of $4.52 a share on sales of $3.6 billion.