Google shares hit record high despite drop in cost-per-click

Larry Page: Google's chief executive
Larry Page: Google's chief executive

Google's shares hit an all-time high yesterday (17 October), after the brand revealed better-than-expected third quarter results.

The search giant revealed quarterly profits of $2.97bn (£1.84bn) in the three months to 30 September, compared to the $2.18bn (£1.34bn) it made in the equivalent period in 2012.

Revenues also grew, increasing 12% year on year to reach $14.9bn (£9.2bn), while paid clicks were up by 26% on the previous year.

However, the rise in profits was set against an 8% year-on-year decrease in cost per click (CPC). It also suffered a $248m (£153m) operating loss on its Motorola unit, despite the recent launch of the Moto X handset.

Investors reacted positively and Google’s share price soared by 6% in after-hours trading, reaching a record-high of $941.25 (£581.58).

Larry Page, Google's chief executive, said: "We are closing in on our goal of a beautiful, simple, and intuitive experience regardless of your device."

Alistair Dent, head of pay-per-click (PPC) at agency Periscopix, commentated: "We are yet to see the full impact of Google’s Enhanced Campaigns proposition.

"Revenue is being driven up by a change in ad formats as part of Enhanced Campaigns, which mean more clicks per search, rather more money-per-click. So CPC stays low, but overall revenue goes up.

"This can be as much about the expansion of Google presence in developing markets, as about the lag in mobile CPCs. Every time Google opens up a new revenue opportunity, its overall revenues will rise, even though the average CPC is pulled lower."

According to eMarketer, Google is expected to account for 32.8% of all digital ad spend worldwide this year up from 31.5% in 2012.

Google’s position in mobile is even stronger, with eMarketer estimating the firm will grab 53.2% of the worldwide mobile ad market this year, up on its 52.4% share in 2012.

Discussion

Before commenting please read our rules for commenting on articles.

If you see a comment you find offensive, you can flag it as inappropriate. In the top right-hand corner of an individual comment, you will see 'flag as inappropriate'. Clicking this prompts us to review the comment. For further information see our rules for commenting on articles.

comments powered by Disqus
Brand Republic Jobs

subscribe now

Latest

Oasis #springasmile digital campaign gets people doing good deeds
Coca-Cola: 'Don't approach bloggers with a fait accompli'
Tesco CMO Matt Atkinson: 'It is so important not to stereotype mothers'
McDonald's gives Ronald a new look ahead of global 'Fun times' social media push
In pictures: BrewDog opens first craft beer shop BottleDog for 'beer aficionados'
Facebook ad revenue leaps $1bn as it invests in targeting
Malteser or Maltesers? Mars takes Hershey trademark dispute to court
Apple Q2 profits top $10bn as iPhone sales soar
Lynx tells men not to leave love to fate
HBO captures awkwardness of watching sex scenes with parents
Primark to open first US stores with Boston chosen as flagship location
Marketing spend on the up but a reality check is needed before celebrating
Top 10 ads of the week: Jackpotjoy and BT Broadband fend off Kevin Bacon
Lidl beats Tesco to 10m Facebook fans
Center Parcs ad banned for encouraging parents to take kids out of school
Coca-Cola, Cadbury and Amazon named top brands for targeting youth market
Leaked document shows Nokia to be rebranded as Microsoft Mobile
Nike lays-off hardware staff in move that casts doubt on future of FuelBand
Greenpeace says save the bees or humans will die
What brands need to know about changes to VAT and online downloads in 2015
Jimmy Savile victims urged to claim compensation in new ad campaign
UKIP launches biggest  ad campaign and stirs up 'racist' accusations
Apple boss Tim Cook provides voiceover on ad touting firm's renewed green commitments
John Lewis walks consumers through its history to celebrate 150 years of business
Waitrose boosts content strategy with 'Weekend Kitchen with Waitrose' C4 tie-up
Hottest virals: Cute puppies star in Pedigree ad, plus Idris Elba and Fruyo
Amnesty International burns candles to illuminate new hope
Tom of Finland's 'homoerotic' drawings made into stamps
Toyota achieves the impossible by calming angry Roman drivers
YouTube reveals user habits to appeal to 'older' marketers