Google Inc. grew its paid clicks on ads 31% across all sites and 40% across Google sites and those in its advertising network in the fourth quarter of 2015, the search giant reported today.
The earnings release is the first financial statement since the company split into two segments: Google and Bets, which encompasses eight “moonshot” subsidiaries, such as the Nest connected-device division or self-driving cars.
The growth stems in part from the search giant’s increased push to drive consumers to click on search ads, rather than natural search results. For example, Google in the third quarter 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. And Google’s AdSense Network in August began presenting PLAs to shoppers on a number of large merchants’ sites, and then added PLAs to Google Image search results on smartphones in December. More inventory, along with more ad dollars flowing to mobile ads, led the cost per click on Google websites to fall 16%.
Mobile search—where advertising is less expensive—was the biggest driver of new revenue during the quarter, said Sundar Pichai, Google’s CEO, during a conference call with analysts.
“This holiday season, we found that shopping moments replaced shopping marathons,” he said. “Shoppers turned to their mobile devices to purchase gifts online in spare moments throughout the day all season long, and marketers turned to our mobile ad offerings to reach those customers.” In the United States, for example, Product Listing Ad revenue on smartphones exceeded PLA desktop revenue on Thanksgiving, Black Friday, and throughout that holiday weekend.
“Not only were people using mobile ads to shop online, they also used their phones to find the best products and prices in stores around them,” he said.
Google has also been successful at helping retailers and other marketers drive consumers to download their apps via tools such as Universal App Campaigns, which help marketers manage campaigns across Google Play, YouTube, search and Google’s Display Network, Pichai said.
For the fourth quarter ended Dec. 31 Google also reported:
- Advertising revenue of $19.078 billion, up 17.0% from $16.309 a year earlier.
- Google revenue of $21.178 billion, up 17.7% from $17.997 billion.
- Aggregate paid clicks rose 31%.
- Paid clicks on Google websites increased 40%.
- Aggregate cost per click fell 13%.
- The cost per click fell 16% on Google websites.
For the full year, Google reported:
- Google revenue of $74.541 billion, up 13.5% from $65.674 billion.