Google Paid Search Growth Slows Dramatically

Although it's still growing, Google's paid search growth continues to slow down. The companyEUs paid search ad spending rose 12 percent year over year, down from 24 percent a year earlier, according to the second quarter Merkle|RKG Digital Marketing Report.

With advertisers continuing to face higher average cost-per-click (CPC) -- the cost was, on average, 40 percent higher -- Google click traffic growth also dipped 1 percent. Low YouTube CPCs are contributing to the downfall -- without the viral video site, Google-specific CPCs actually rose 13 percent compared to the same quarter last year.

What about GoogleEUs competition? Bing Ads growth slowed from last quarter but still looks better year over year, increasing 27 percent. However, Bing ad CPCs only climbed 2 percent. Facebook, though, was a big winner with ad spend and CPCs rising. Advertisers spent 69 percent more on Facebook ads year over year and CPC is up 30 percent year-over-year.

Competing for Market Share

Since Bing Ads replaced Google as the default search engine on AOL, Google took a tiny hit. But that loss on top of MozillaEUs move to kill Google's default status has added up to a dip of a few percentage points in the last couple of years.

Google may soon take another hit as AppleEUs Safari browser and iOS devices may also remove Google as the default search engine. AppleEUs ecosystem produced 35 percent of search ad clicks in the second quarter of 2015.

Meanwhile, Gemini, YahooEUs new search platform, now accounts for 15 percent of total Bing and Yahoo paid search clicks across all devices among advertisers who have adopted the program. All told, Gemini traffic share jumped 2.2 points from April to May.

Why Google Is Slipping

We caught up with Greg Sterling, principal analyst at Sterling Market Intelligence, to get his thoughts on the report,...

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