Google Cost-Per-Click Falls 9% in Q1 2014 – Is Facebook To Blame?

Yes, the times they are a changing and while Google is still bringing in the big bucks with a whopping $15.42B in revenue in Q1 cost-per-click fell 9%. While CPC fell total paid clicks increased by 26% y/y which makes the 9% not look too bad, but still it’s hard to ignore. The search giant has long dominated the online advertising space but lately companies like Facebook have been encroaching on their territory.

Google Mountain View

Google’s revenue grew 19% y/y which helped buoy the stock 4% in regular trading today. Still despite strong revenue growth Google failed to meet analyst expectations with an EPS of $6.27 vs. an $6.40.

So what does a falling cost-per-click mean? Well first let me just re-iterate that total paid clicks increased by 26% so you really can’t begin doomsday predictions but there is a change going on and it’s important to notice. I personally think this has a lot to do with the incredible growth of Facebook advertising which has proven to be an incredibly strong customer acquisition channel for companies looking beyond Google Adwords.

What do you think? Is this just a blip in the radar or is Facebook starting to chip away the big G? Comment and let your voice be heard!

Photo Credit: Håkan Dahlström via Compfight cc

Morgan Linton

Morgan Linton