For those who have been keeping up on this particular bit of news, Google CFO Patrick Pichette said that Google’s declining ad click costs haven’t been caused by mobile, but by YouTube. While at SMX Advanced in Seattle, VP of search ads, Jerry Dischler said this week that YouTube has been the cause of declining CPCs not just recently, but the entire time. We’re talking CPCs that started heading south as early as Q4 of 2011.
It was reported by Google that last quarter, Google sites, like Google.com, Gmail, Maps and YouTube, all increased by 25 percent year-over-year while CPCs from Google sites fell by 13 percent.
So what did Pichette have to say on the call about the numbers?
So many commentators are incorrectly assuming that the growth trends in our sites, clicks, and CPCs are primarily due to difficulties monetizing search on Mobile, but that’s in fact not the case. Remember that sites metrics includes clicks and revenues related to ads served and Google’s and on properties, most notably, obviously, Google.com, but as well as YouTube, engagement ads like TrueView, where users choose not to skip an ad is counted as a click.
While over the past year, we have seen YouTube viewership claimed dramatically both in established markets but also due to rapid expansion in emerging markets, and quality improvements in the TrueView ads mean that more users are in fact choosing not to skip them, increasing the overall ad view.
So this means that there is much higher volume of TrueView ads being seen, which has been a significant driver of year-over-year growth in numbers that you have seen in site’s clicks. TrueView ads currently monetize at lower rates than ad clicks on Google.com, but as you know, video ads generally reach people earlier in the purchase funnel and so across the industry, they tend to have a very different pricing profile than they would have on a typical performance search ad. Excluding the impact of YouTube TrueView ads, growth in site clicks would be lower, but still positive, and our CPCs would be healthy and growing year-over-year. So really, we have two positive stories to tell here today.
So was Pichette attributing the declining CPCs since Q4 2011 on YouTube, or jsut the most recent quarter? It isn’t very clear. But, Dischler did say that the falling CPCs have always been about YouTube.
So if YouTube was the culprit this entire time, why didn’t Google say anything about it up until now? It isn’t clear why Google waited this long to name a specific reason why the declining metrics were, well, declining, and try to put to rest concerns that the compan hasn’t been able to monetize mobile very well.