Google Cost-Per-Click Falls 9% in Q1 2014 – Is Facebook To Blame?

Yes, the times they are a changing and while Google is still bringing in the big bucks with a whopping $15.42B in revenue in Q1 cost-per-click fell 9%. While CPC fell total paid clicks increased by 26% y/y which makes the 9% not look too bad, but still it’s hard to ignore. The search giant has long dominated the online advertising space but lately companies like Facebook have been encroaching on their territory.

Google Mountain View

Google’s revenue grew 19% y/y which helped buoy the stock 4% in regular trading today. Still despite strong revenue growth Google failed to meet analyst expectations with an EPS of $6.27 vs. an $6.40.

So what does a falling cost-per-click mean? Well first let me just re-iterate that total paid clicks increased by 26% so you really can’t begin doomsday predictions but there is a change going on and it’s important to notice. I personally think this has a lot to do with the incredible growth of Facebook advertising which has proven to be an incredibly strong customer acquisition channel for companies looking beyond Google Adwords.

What do you think? Is this just a blip in the radar or is Facebook starting to chip away the big G? Comment and let your voice be heard!

Photo Credit: Håkan Dahlström via Compfight cc

{ 11 comments… add one }

  • Nick April 16, 2014, 4:25 pm

    Google is too big for everyones good.

  • Mark M April 16, 2014, 4:47 pm

    Stock houses are saying “buy” not sell. Google’s adwords business is a cash cow. I think people were looking for more bang for the buck. Let me explain, there were more clicks but less revenue for Google. This data implies the actual click-thru keywords that were used and targeted for adword campaigns have recently been costing less money for the consumer. Probably, because people are bidding on more cheaper keywords, instead of the expensive keywords. It might be smarter to target cheaper relevant keywords and stretch your daily budget into more clicks and (eyeballs) visitors per day. I can tell you first hand, I used cheaper priced relevant keywords with adwords and they can convert to a sale as good as expensive priced keywords. Which would bring us into another topic Landing Page Optimization and A/B testing.

  • brand April 16, 2014, 5:24 pm

    There was a blogger on another site that said, people don’t need to pay for a .com domain when you can reach people to sell your products and services on facebook and twitter now.
    I have seen signs of this in my searches for domain names, the .com is available but it’s a full blown business that has been selling goods and services via, facebook and twitter.

  • Michael April 16, 2014, 5:46 pm

    Hi Morgan, Doing the math they made a lot more money and looking at the Google ads on my own site I notice how they are always changing them and making them more interesting to click. But they still have more work to do seeing how they have been showed me the Loews hotel now for the last two weeks lol! It’s probably possible that facebook is getting that 9% because even I was looking into advertising on facebook a week ago because I have never tried it. What about yahoo? Yahoo has been looking a lot better too!

  • Leonard Britt April 16, 2014, 6:53 pm

    I may have an interesting story on Facebook marketing – need more time to collect enough data…

  • Nick April 16, 2014, 7:22 pm

    @brand: you couldnt pay me to sell via Facebook. When facebook pulls the rug from under those people, they’ll come crawling back to the dot com. I guess its time to buy those dot coms! I dont trust facebook or any closed system for that matter as far as I can throw it. I want my dot com and I want full control of my sales platform.

  • Joe April 17, 2014, 2:04 am

    There is nothing that is just that times are changing and there are other viable ideas for global user search engines to find other opportunities best.

    Some time ago I predicted in an executive summary of a business plan that this would happen but the time before that was crazy predicting falling gradually Google your cpc, ppc, cpm all fall slowly.

    Facebook not blame them who have also dropped, this is like climate change.

    Who does not change down there are many ways to make the company and global users get all classes begin to see something new in the new forms of online advertising ads and also not to be missed off this solves a lot but last online see every day is heavy most of email to reach any user are many viral marketing crap and misleading discounts, promotions and offers ……………..

    In many cities leave notes in the mailboxes of buildings: Do not allow advertising, junk flooding because of it, there are other ways of doing things without flooding the mailbox of each floor.

    Gradually it becomes much money and if you know what people want this is wiser than he who sells and this happens not hear that on the street the difference is huge online social networks to be good as you are using but who use facebook more youth and children who buy only parents etc.

    Every country is different in social networks, my best Twietter Facebook personally latter in a week receive over a thousand emails from friends with bullshit: open one: Good day, today it rains, open a different one, Hi I go to University and this is a social network, be it social Hicks.

    Facebook for business it ok.

  • HowieCrosby April 17, 2014, 2:58 am

    @brand
    It would be good to find some evidence based research regarding the positive results from the social media marketing.

  • Albert April 17, 2014, 9:07 am

    I think it has a lot to do with people selling courses on how to sell on facebook. These courses have been growing and are being tauted as cheap as “one cent.” The only problem is the quality of people you are getting for “one cent.”

  • albert April 17, 2014, 9:45 am

    @Brand
    As far as the .COM basically being irreleveant (especially to one’s business), all I can say is:
    FINE, DON’T REGISTER THEM!!!
    Leave them to me and others that still love them.
    The new T.L.D.’s is probably the best thing that has happened to domain name investors.
    Why?
    Those who were fortunate enough to have registed them a long time ago are dropping them or selling them for pennies on the dollar.

    I picked up a domain on the drop for $69.00 six months ago. On parking alone, it is making me $15.00 a month.

    I hand registered one about 2 years ago and I average about $500 (yes, $500) a year from it on parking alone.

    I know, not something to brag about, but on an R.O.I., yes it is.
    So, please don’t hound the .coms and go to the new, better, T.L.D.’s

  • albert April 17, 2014, 9:47 am

    @Brand
    Forgot to mention, I have registered 23 .com’s in the last 30 days and have a couple of others on backorder.
    So, I do put my money where my mouth is.

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