ComScore have come out to explain a little more detail behind the release from a few days ago which announced the decline in clicks on Google’s paid search ads.

It seems that the reason for the decline in clicks is down to improvements made by Google to increase the click quality (such as only making text clickable instead of the entire ad unit).

One has to wonder whether a letter from Google has triggered this deeper analysis of the issue…

Anyway, with the recent news that click fraud is rising rapidly it’s timely for Google to remind us of these improvements. It will be telling to see the Click Forensics data for the 1st quarter 2008.

Google losing some favour?

February 26, 2008

ComScore have released some data showing that clicks on ads on Google were down 7% in January compared to December and flat year-on-year (actually down 12% qtr-on-qtr).

This is pretty astounding news after the growth Google has seen in ad clicks over the last few years. The thought is that this isn’t anything fundamentally to do with Google or any competitor taking market share away, rather analysts seem to think this is a sign of the economic uncertainty we are currently seeing. Times are hard so people click less on ads….

What would be interesting is to see the search volume data alongside this click data to see whether searches have declined or stayed the same.

Needless to say Google’s shares have taken a bit of a battering today because of this.

Reuters have been holding a Travel & Leisure Summit in Los Angeles and this was one of the topics of conversation. The main answer seemed to be that deals will be key!

While consumers may tighten their belts, hoteliers may give better rates to online travel agencies as they will be more eager to fill their rooms. This should really benefit the large online agents such as Priceline, Expedia, Orbitz etc.

While a recession could erode demand generally it can also have the opposite effect in the activity of bargain and deal hunters as more people hunt for something affordable. This could benefit not just the big players but also the price comparison websites as they have access to so many rates they are the obvious place for any bargain hunter to start their search.

Another factor of economic weakness could be airlines who cannot fill all their seats, this should push them to offload unsold stock to online travel agents and may mean that there are some better deals than usual available.

Of course this is all conjecture, at the moment we have no idea how bad an economic downturn could get (wait for the commercial property market to show it’s weakness) or how long it could last.

My tip for this year is price comparison websites. They are positioned well as far as price goes for a year of weaker demand and this has to be the year that they finally improve their user experience to a point where they are so easy to find deals that they start to erode market share of slower moving websites (remember, a lot of price comparison sites are technology companies rather than travel). Looking forward to seeing how Kayak, Mobissimo, Travel Supermarket etc get on in this economic climate!