Google Q2 Results Disappoint Amid Continuing PPC Advertising Price Drop

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Much like its search engine rival Yahoo!, Google is the latest firm to post what could be considered somewhat disappointing results - especially in the UK where the firm's revenues have fallen for the first time in eight quarters.

While the search engine giant posted overall profits of $9.7bn, up 16% on this time last year, the figures were still much lower than many analysts expected.

In the UK, sales dropped by almost five per cent to $1.32bn (£868m), although its UK turnover rose 15% year on year: A significantly lower figure than the 23% jump in the same quarter last year and the 19% leap witnessed in 2011.

Despite these figures however, Britain still remains Google's biggest market outside the US, generating ten per cent of the firm's global revenues this year.

In particular, those in the industry have identified Google's struggle may be due to the drop in search advertising prices. The cost per click (CPC) advertisers pay to Google each time an Internet user clicks on PPC advertising on the Google search engine, fell by six per cent compared to last year.

In a speech given during the earnings call, Google CEO, Larry Page, said: "These kinds of changes don't happen that often, once a decade, maybe even less frequently."

The decline had seemingly started to ease in the last three quarters, leading many analysts to only predict a three per cent fall in the second quarter - less than the four per cent decline witnessed in the first quarter - however, this has now proved to be something of an overzealous prediction.

The Google chief executive was not too downbeat about the figures though, suggesting a shift to mobile was something the search engine firm was actively embracing.

He added: "The shift from one screen to multiple screens and mobility creates tremendous opportunity for Google."

The drop in search advertising prices is actually nothing new, with the figures in decline since the fourth quarter of 2011.

Many analysts have put the blame on the fact the advertising on mobile sites typically has far lower prices than those viewed on desktop computers.

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