Martech: Martech is Marketing Logo
  • Topics
    Digital Transformation
    Marketing Operations
    Data
    Customer & Digital Experience
    Performance Marketing
    Marketing Management
    Special Reports
    All Topics
  • Conference
  • Webinars
  • Intelligence Reports
  • White Papers
  • What is MarTech

Processing...Please wait.

MarTech » Customer & Digital Experience » Google: YouTube Has Been The Cause Of Declining CPCs This Whole Time

Google: YouTube Has Been The Cause Of Declining CPCs This Whole Time

Google executive explains that YouTube has been the cause of negative CPC growth long before last quarter.

Ginny Marvin on June 5, 2015 at 3:28 pm | Reading time: 3 minutes

google-smallg1-1920You may recall that on the most recent earnings call with analysts, Google CFO Patrick Pichette said that Google’s declining ad click costs, have not been caused by mobile, as many have assumed, but by YouTube. This week, VP of search ads, Jerry Dischler, told the audience at SMX Advanced in Seattle, that YouTube has been the cause of declining CPCs not just in the past quarter, but this whole time — CPCs started heading south in Q4 2011.

Last quarter, Google reported that clicks to Google sites (Google.com, Gmail, Maps, YouTube) increased by 25 percent year-over-year while CPCs from Google sites fell by 13 percent.

Here’s what Pichette said 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.

It wasn’t quite clear if Pichette was attributing the declining CPCs since Q4 2011 on YouTube, or just the most recent quarter. However, when asked if it was a one-time impact or long-term, Dischler said that the falling CPCs have always been about YouTube.

The YouTube explanation seemed to come out of left field since Google has never mentioned YouTube explicitly among the various factors it has listed when addressing questions about CPCs. Answers typically the sounded something like this explanation Pichette gave on the Q3 2013 call: “Monetization metrics continue to be impacted by a whole set of factors … they include geographic mix, channel mix, property mix as well as product and policy changes”.

It’s not clear why Google waited this long to name a specific cause for the declining metrics and try to put to rest concerns — and lots of commentary — that the company hasn’t been able to monetize mobile well. Google has repeated on several occasions, including in a letter to the SEC, that it believes breaking out mobile from PC performance would only cause confusion. Dischler also reiterated this concern in the SMX keynote discussion this week.


Opinions expressed in this article are those of the guest author and not necessarily MarTech. Staff authors are listed here.


New on MarTech

    Webinar: The key to email marketing success
    The FTC weighs in on customer data privacy
    Whatever happened to customer journey orchestration?
    The latest jobs in martech
    B2B buyers are much more concerned about a company’s values than the general public

About The Author

Ginny Marvin
Ginny Marvin was formerly Third Door Media’s Editor-in-Chief, running the day-to-day editorial operations across all publications and overseeing paid media coverage. Ginny Marvin wrote about paid digital advertising and analytics news and trends for Search Engine Land, Marketing Land and MarTech Today. With more than 15 years of marketing experience, Ginny has held both in-house and agency management positions. She can be found on Twitter as @ginnymarvin.

Related Topics

Customer & Digital ExperienceDataPerformance Marketing

Get the daily newsletter digital marketers rely on.

Processing...Please wait.

See terms.

ATTEND OUR EVENTS The MarTech Conference logo.

September 28-29, 2022: Fall

Start Training Now: Master Classes

Start Discovering Now: Spring



The SMX Conference logo.

Start Training Now:: SMX Advanced

November 14-15, 2022: SMX Next

March 8-9, 2022: Master Classes

Webinars

Tracking Growth From Organic Search

Beyond the Buzzword: Transform Digitally to Drive Organic & SEO Growth

Leap or Linger: Determining Which Ad Platforms to Test for Your B2B Brand

See More Webinars
Intelligence Reports

Enterprise Marketing Performance Management Platforms: A Marketer’s Guide

Enterprise Customer Journey Orchestration Platforms: A Marketer’s Guide

Enterprise Account-Based Marketing Platforms: A Marketer’s Guide

See More Intelligence Reports
Featured White Paper

The CMO’s Formula To 3x Your Digital Marketing Campaign Results

See More Whitepapers
Search Our Site

Receive daily marketing news & analysis.

Processing...Please wait.

Topics

  • Transformation
  • Operations
  • Data
  • Experience
  • Performance
  • Management
  • All Topics
  • Home

Our Events

  • MarTech
  • Search Marketing Expo - SMX

About

  • What is MarTech
  • Contact
  • Privacy
  • Terms Of Use
  • Marketing Opportunities
  • Staff

Follow Us

  • Facebook
  • Twitter
  • LinkedIn
  • Newsletters
  • RSS

© 2022 Third Door Media, Inc. All rights reserved.