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

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

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

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TOPICS: Banking, Google
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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.

Topics: Banking, Google

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5 comments
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  • Penelope and Rupert demand proprietory lock-in model

    Instead of an organic and economically aligned advertising model, investors insist that locking everybody into an OS Monopoly is a much better way to go.

    "If we can get at their bank accounts AND keep them stupid at the computer at the same time, that's a win-win for us" said Penelope. "(giggling) ... the peasants can only just about read or write, so I wouldn't trust them with anything more than a mouse" joked Rupert.
    "It's all about the shareholders and off balance sheet liabilities" said Ballmer passing nearby.
    fr0thy2
    • And the article never mentioned Microsoft

      did it?

      I guess your postings should just be viewed as fake; made up stories so as to claim "proof" of a Microsoft failing.

      A most logical guess would place your home under a bridge in a swamp somewhere.
      GuidingLight
      • Of course you're here for your beloved

        and will not perceive, or will deny "as fact" that MS are doing a mindset routine against Google - the only company that stands in their way of IT world domination (FOSS aside ;-)

        Just pointing out the obvious .....
        fr0thy2
        • Ah, no you are not

          [i]Just pointing out the obvious[/i]

          The article was OBVIOUSLY about Google, not Microsoft, it was OBVIOUSLY about paid clicks and not an operating system, and it was OBVIOUSLY from a Citigroup analyst's perspective, not Ballmers.

          The only thing [b]obvious[/b] in all of this is that you do not read the articles, instead just going straight to the comment portion of the screen and spout off how much you dislike Microsoft, regadless of whether the article had anything to do about them.

          I wonder if you do the same on the cooking or hobby sites you frequent, spout off how much you hate Microsoft and that it's Ballmer's "incompetence" that kept someones souffle from rising.
          GuidingLight
  • Online advertising will eventually...

    prove to be a poor way for companies to spend their marketing dollars. I personally have never clicked on an Internet ad and certainly never based a purchasing decision based on such ads. I have to wonder how many online ads actually pay a return on the investment in such ads.

    Companies like google whose existence is based on online advertising will eventually loose their appeal. It's new now and everyone thinks it pays. But when the smoke clears and the cards are counted, online advertising will fall way back. It simply won't return on the investment as other ad media do.
    bjbrock