Google’s paid clicks increase 29% in the first quarter

April 21, 2016 04:42 PM

Google Inc.’s paid clicks on ads across its sites and advertising network increased 29% in the first quarter of 2016 that ended March 31, compared with the same period a year ago, the search giant reported today in its first quarter earnings release.

On Google sites, including the search engine, paid clicks rose 38% in Q1. Google does not disclose the number of paid clicks, only the percentage increase.

The average cost per click on a Google ad decreased 9%  compared with the same period a year earlier. On Google sites alone, the cost per click fell 12% year over year, Alphabet Inc., Google’s parent company, reported.

For the first quarter ended March 31, Google also reported:

  • Advertising revenue of $18.02 billion, up 16.2% from $15.51 billion a year earlier.
  • Google-owned sites, such as its search engine and YouTube, generated $20.26 billion in revenue, up 17.4% from $17.26 billion. Excluding the impact of the strong dollar, revenue increased 23% to $20.85 billion.
  • Net income of $4.21 billion, up 18.3% from $3.56 billion.
  • Google’s traffic acquisition costs, which is what Google pays to websites that host Google ads, rose to $3.79 billion, up 13.1% from $3.35 billion. Company executives explained to analysts today that Google pays a higher fee for placing ads on other companies’ mobile websites than on desktop sites, and that mobile is a growing share of the business, leading to an increase in this expense.

Google continues to make changes to its Product Listing Ads based on consumer shopping behavior on mobile, Vineet Buch, director of product management for shopping search, said at the ChannelAdvisor Catalyst conference this month. ChannelAdvisor Corp. is a marketing firm that helps retailers sell on online marketplaces such as those operated by Inc., No. 1 in the Internet Retailer 2016 Top 500 Guide, and eBay Inc.

For example, Google in Q3 2015 added a text ad slot at the top of its mobile search results and enlarged the size of its Product Listing Ads, which include images. Google also displays more products in Shopping carousels, which shoppers can scroll through with arrows, Buch said in his presentation at the conference.

In August, Google’s AdSense Network began presenting Product Listing Ads to shoppers on a number of large merchants’ sites, and then added Product Listing Ads to Google Image search results on smartphones in December. AdSense is the Google service that places ads on the web and mobile sites of other companies, giving them a share of the revenue.




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