Google’s blooming, will the ad spend down turn hit them?

October 20, 2006

When all others are predicting a downturn and slowing ad sales Google has turned in an amazing quarter yet again! Yahoo‘s quarter was less than inspiring, partly blamed on falling ad revenue, and other sources are predicting further slowing of ad spend but as yet it doesn’t appear to have hit Google where it hurts.

Google have announced a doubling in third-quarter profit from a year ago with net revenue rising 70%.

That’s impressive figures! So what is keeping it all steamrollering along? Well it seems to be PPC (paid search, Adwords). While the organic search results in Google are certainly getting worse, all the SEO’s out there will testify to this) the paid links are booming, becoming easier to use for advertisers and becoming more relevant for users. All of this points to continued growth in this area.

Some are saying that even PPC will see a downturn, and yes, the volumes may drop a bit, but if managed correctly PPC is something that your company needn’t slow down on. If you treat your paid search campaign as a cost of sale and always keep your average cost below a threshold where by you are still profiting from it then just keep going! Thats the beauty of paid search. You can monitor the results so closely and fine tune a campaign so much that any change in consumers spending can be adjusted for so that you don’t lose out. It’s a remarkable sales channel when managed effectively!

So while there may be a consumer slow down ahead the PPC revenue may slide a bit but I wouldn’t see that causing Google any worries as it will always make up a sizeable chunk of their revenue. And with little competition coming from Microsoft and Yahoo (neither of their new paid search platforms are all that impressive) I think Google will continue to throw in record quarters for some time to come.


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