Google’s Mobile ‘Problem’ Squeezes Pricing in First Quarter

Costs Per Click down 9 percent

Google topped $15 billion in first quarter revenue but still reported lower costs per click while the industry shifts to less expensive mobile ads. Google’s quarterly results also fell short of Wall Street estimates, sending the newly split stock down about 2.6 percent to $542 a share in after-hours trading.

“Google’s got a mobile problem just like a lot of companies,” said Colin Gillis, senior technology analyst with BGC Partners.

Google told analysts on its earnings call that it expects mobile pricing will eventually surpass desktop. The search giant is working to prove that mobile clicks are more valuable.

Indeed, Google and data tracking firms DataLogix and Acxiom are testing how to monitor consumer behavior all the way from ad views to the cash register, The Wall Street Journal reported. Google also is delivering new audience measurements to advertisers in areas like video display, thanks to deals with Nielsen and comScore.

More effective measuring tools like these are key to driving the price of clicks, analysts said.

Here is a look at the numbers for the first quarter ending March:

  • $15.4 billion in total revenue represented an increase of 19 percent from the year before.
  • Google sites ad revenue reached $10.5 billion, up 21 percent from the year before.
  • Network revenue, comprised of partner sites, of $3.4 billion was up 4 percent year-over-year.
  • $3.45 billion in profits, up $3.35 billion from a year ago.
  • Paid clicks were up 1 percent versus Q4 2013 and improved 26 percent year-over-year.
  • Cost per click was down 9 percent year-over-year and flat sequentially.

Publish date: April 16, 2014 © 2020 Adweek, LLC. - All Rights Reserved and NOT FOR REPRINT