Slump in Google paid clicks

Google logoCould the slump in the American economy in particular, and elsewhere in the world too, be flowing through into the number of people clicking on Google ads?

ComScore “measures clicks on the four-line ads that Google runs next to its Internet search results. Clicks on such sponsored links rose 3 percent to 515 million in February from a year earlier, ComScore said Wednesday. In January, Google had no year-on-year growth, after a 25 percent increase in the fourth quarter over the previous year,” reported Bloomberg.

“The data may stoke investors’ concerns over a slowdown in online shopping, said a Stanford Group analyst, Clayton Moran, who rates Google stock ‘hold.’”

The release of the data led to a decline in Google’s share price of 3.2 per cent with the stock down 3 per cent in 2008. Moran believes the slowing of growth is due to the economy.

However Google also recently “upgraded its systems to eliminate promotions that are not relevant to searches, Nick Fox, product manager, said in an interview last month. That makes people more likely to click on ads even though a fewer number are shown on users’ screens, he said,” according to Bloomberg.

“In the long run, this should increase relevancy and therefore make it an even more efficient ad format, which would raise prices,” Moran said. “In the short term, it looks like it’s having a negative impact.”

So, if this is just a correction through a change to make Google ads more relevant, this may not be an issue. But if this continues then it is likely to be something that will concern domain monetisers.