With Google’s new enhanced campaigns available to all advertisers, and as of the time of the Q2 earnings call over 75% of all active campaigns already taking advantage of the service, the response has been mixed at best. Some people like all the additions provided, and others still aren’t convinced of the benefits. One big reason why many advertisers weren’t happy with the change is because they believed that it would increase their total costs per click. According to the earnings call for Q2 2013, however, it appears to be having the opposite effect.
On the call Larry Page, Google’s CEO, announced that the average cost-per-click for ads both on Google sites and their network members has decreased about 6% year over year. They are down 2% from the first quarter of 2013. The total number of paid clicks for the AdWords program rose by 23% year over year, and 4% since the first quarter which more than made up for the loss in cost per click, but it is still interesting.
There was no speculation as to why the cost per click has dropped over the past year, though it was likely a combination of factors. As Bing, Yahoo and other search engines continue to improve their advertising networks it makes sense that companies will begin to spread out their advertising budget a little more evenly.
Another factor appears to be the fact that the total number of clicks grew at an impressive 23%, which is likely quite a bit faster than the rate of new advertisers joining the program. The additional clicks are helping to drive the total cost per click down, while still resulting in higher total revenue for Google as well as a higher total cost for advertisers, though they are getting more visitors for their money.
At this point it is impossible to determine what, if any, impact the new enhanced campaigns have had on these changes. Now that the enhanced campaigns are being forced on all AdWords members (effective Monday) it will be interesting to see what, if any, changes in the total clicks and the total CPC we’ll see for the third quarter.
You can hear the Earnings call from Google HERE.
