Wall Street is acting with caution when it comes to Google based on months of reporting that the search engine giant’s paid search clicks are declining. But Google insists that the click reductions are due to improvement in the quality of the ads, not because Google is somehow losing its luster.
The timing for this move may be poor, however. A Business Week article points out that some advertisers may be cutting their ad spend due to a slower economy.
Still, Google is smart to perform quality assurance. As any good search engine marketer knows, the answer lies in revenues, not clicks. Everyone wants their conversion ratio to be as low as possible, and Google is smart to keep their eye on providing quality for the user (both buyers and clickers). A temporary slowdown in growth is far better than ignoring a quality issue and seeing sustained declines down the road.
Q4 2007 revenues showed growth but came in just under Wall Street’s expectations. This coincided with news of a slowdown in clicks. We won’t see Q1 revenues until sometime next month, but that will give some insight into whether or not Google is on the right track.