Total Marketing Solutions

Recent news articles have signalled some bad news for Google. The company, whose good-guy image and motto of “Don’t be evil” have helped it to survive previous bad news stories, such as the ongoing concerns over the length of its cookie to the furore over its censorship of results for Chinese users. And it’s likely that the news that Google is planning its first job losses will fall into this category, particularly as they’re a result of its acquisition of DoubleClick.

However the news that will give Google most cause for concern is that the rapid growth in advertising clicks has faltered. The Guardian reports that January 2008 saw zero growth in paid clicks, while February saw just a 3% rise. This contrasts with monthly increases of between 25% and 40% in 2007.

So what’s behind this? Are Pay Per Click (PPC) advertisers spending less or are users becoming more choosy about what they click on? My feeling is that it’s a mix of the two. Advertisers are now better at tracking results, and are acutely aware of the difference between traffic and sales. The days of generating traffic for traffic’s sake are gone. And users are aware that some paid adverts can find them just what they’re looking for – but some advertisers try to hijack traffic to sites that are light in content, perhaps in the hope of earning commission as an affiliate, which can result in a poor experience for the user.

I don’t believe that Google’s dominance is under threat, for now. As an online marketing consultant I know of PPC advertisers who spend significant sums with Google AdWords but don’t bother with Yahoo/Overture or MSN as they don’t deliver volume. As long as Google dominates search traffic, it will dominate the PPC market.

And what does this mean for SMEs? Not too much, for now. Consider your Pay Per Click campaign like any form of marketing. Keep a close eye on it and track your results. And if it’s not working to target, cut it out.