When Google published their earnings release for 2011 last month, one of the highlights was the reduction in cost-per-clicks across its network. Latitude Digital Marketing data experienced similar trends, seeing a drop in paid search cpcs quarter on quarter in Q4 2011. There are many factors that will have contributed to some extent;

  • mobile paid search volumes increasing (cpcs lower on both smartphones & tablet)
  • retail seasonality (traffic has predominantly lower cpcs)
  • Increased activity through the Google Display Network (traffic is cheaper)
  • Google increasing the reward for advertisers with strong quality scores by discounting cpcs further (particularly   relevant for mobile traffic)

Naturally direct advertisers and agencies will have different experiences as trends vary depending on which vertical they operate within. Latitude Digital Marketing has a client base that operates across a wide range of verticals; including retail, leisure, finance and gambling. I doubt Google will be too concerned with these trends though as their quarterly revenues were in healthy shape. Indeed, our search engine investment was higher with Google in Q4 than Q3, dispelling any theories that reduced cost has impacted cpcs. As anticipated, cpcs are back up in January this year,