Paid clicks on ads across Google’s sites and advertising network jumped 36% compared with the same period a year ago, the company reported today.
Looking specifically at paid clicks on Google-owned sites, such as its search engine and YouTube, the increase was more dramatic, rising 43% year over year, thanks in part to Google allocating a larger share of its search-results page real estate to ads.
The average cost per click on a Google ad across all formats and venues fell 15% compared with the same period a year earlier. On Google sites alone, the cost per click fell 16% year over year, while the cost per click on Google Network Members’ websites decreased 19% thanks in part to an increase in mobile ads, which cost less than desktop.
A growing share of Google’s growth is stemming from retailers allocating more of their search ad budget to Product Listing Ads from text ads, according to a new report released this week by performance marketing agency Merkle Group Inc. The report found that Merkle clients boosted their PLA spending 30% while their spending on text ads grew just 12%. The report also found PLAs accounted for 48% of retailers’ Google paid search clicks in the quarter.
Ruth Porat, chief financial officer of Alphabet Inc., Google’s parent company, also pointed to the growth of mobile search advertising and YouTube as keys to the company’s growth.
For the fourth quarter ended Dec. 31, Alphabet, reported:
- Advertising revenue of $22.399 billion, up 17.4% from $19.078 billion a year earlier.
- Google-owned sites, such as its search engine and YouTube, generated $17.968 billion in revenue, up 20.3% from $14.936 billion.
- Net income of $5.333 billion, up 8.3% from $4.923 billion.
- Google’s traffic acquisition costs, which is what Google pays to websites that host Google ads, rose to $4.848 billion, up 19.6% from $4.055 billion.
For the full year, the company reported:
- Advertising revenue of $79.383 billion, up 17.8% from $67.392 billion a year earlier.
- Google-owned sites generated $69.717 billion in revenue, up 20.9% from $57.685 billion.
- Net income of $19.481 billion, up 18.8% from $16.393 billion.
- Google’s traffic acquisition costs rose to $16.795 billion, up 17.1% from $14.348 billion.