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By | Cade Metz 16th April 2008 18:32

Google paid click rate decelerates (again)

Good news or bad?

For the third straight month, the number of people clicking on Google ads didn't grow quite as quickly as it has in the past. At least, that's the word from market research outfit comScore.

The question is whether this slowdown in paid click growth will significantly affect Google's first quarter earnings, due for an unveiling tomorrow afternoon. The world's largest search engine claims that the paid click dip is part of its master plan to improve the company's longterm well-being. By decreasing "unintentional clicks," the company says, it can increase advertiser "conversions."

Released late yesterday, comScore's new report insists that Google paid clicks increased only 2.7 per cent in March compared with the same month last year, The Wall Street Journal reports. And for the entire first quarter, comScore says, paid clicks increased only 1.8 per cent from the previous year.

Meanwhile, year-over-year paid clicks grew 25 per cent in the fourth quarter and 48 per cent in the third.

Earlier in the year, when comScore noticed that Google's paid clicks dipped significantly from December to January, Wall Street had a fit, and the company's stock price tumbled almost 10 per cent in two days. But then comScore "clarified" its report, arguing that everything was A-OK with the Mountain View outfit.

"The evidence suggests that the softness in Google’s paid click metrics is primarily a result of Google’s own quality initiatives that result in a reduction in the number of paid listings and, therefore, the opportunity for paid clicks to occur," the research outfit said.

Indeed, Google may have increased first quarter revenues by charging advertisers more for the average click. This is well within its powers. ®

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