Thread: Declining Adsense CPC Cost Per Click Rate in 2012

Google reports a 12 percent drop in its cost per click (CPC) for the first quarter 2012 attributed to a shift to cheaper mobile advertising rates.


This follows an 8 percent decline in CPC in the fourth quarter of 2011.

Read more: Google stock drops 4 percent as advertisement rates fall again - International Business Times

The world's top Web search engine attributed the 12 percent drop in its cost per click (CPC) for the first quarter to a shift to cheaper mobile advertising rates among other factors.

These guys are either delusional or evasive. Whether justified or not, when you attack a large percentage of your base of AdSense partners, both your ad exposure on the web and your revenue declines. The real problem is likely because the chickens are coming home to roost.

A lot of businesses are spending less on AdWords because they are not seeing the same payback that they once did because the US economy is not improving as much as we are led to believe. The proof is in the number of major retailers who are on the verge of bankrupcy, such as Best Buy.

Also, advertisers are not moving to cheaper mobile rates in large numbers. Most advertisers are not even aware of it. Mobile advertising works for a relatively small number of local businesses. It doesn't work for most. I track mobile traffic in AdWords for a number of companies and the best that I've seen thus far is 10% of total traffic. For most AdWords advertisers it is less than 5%.

Originally Posted by TopDogger

These guys are either delusional or evasive. Whether justified or not, when you attack a large percentage of your base of AdSense partners, both your ad exposure on the web and your revenue declines. The real problem is likely because the chickens are coming home to roost.

Google's revenue is up 24% compared to the 1st quarter of 2011. But at the same time CPC is down

The new revenue must not be coming from AdWords. I'm seeing more people cutting back on AdWords advertising or canceling, not increasing it.

The decline in advertising rates does appear to be in line with what I am seeing with the advertisers that I manage.

97 percent of Google revenue comes from advertising

Google says 47 percent of its revenues are from the U.S. A lower US dollar could increase revenue.

Yeah, but which advertising is generating the revenue? A 12% CPC drop does not lead to a 24% revenue gain.

The new revenue could be coming from YouTube or other properties. Based upon what I am seeing, I don't think the additional revenue is coming from AdWords.

Originally Posted by TopDogger

Yeah, but which advertising is generating the revenue? A 12% CPC drop does not lead to a 24% revenue gain.

The new revenue could be coming from YouTube or other properties. Based upon what I am seeing, I don't think the additional revenue is coming from AdWords.

I think that the increase in revenue is due to expanded use of the Freebase data the top of the search results. Users are more likely to have their question answered and less likely to visit small publishers for i.e. "what is" searches. This would explain the revenue gain even thought the pie is getting smaller, Google is taking a bigger piece.