The hysteria surrounding a recent report that Google's advertising business has stalled is a major overreaction, says James Lamberti, a senior vice president at comScore.
The comScore report, issued to private clients on Monday, suggested that click-through rates on ads served on the Google network declined dramatically in January. Lamberti argues that if paid clicks have dropped, it's because Google is tweaking its algorithm to improve the fit of the ads served to the end user. Ultimately, Lamberti says, the changes should improve sales for advertisers, which would likely lead to increased bid rates on ads for Google.
"The dominant factor for the decline [in paid clicks] was Google's design," Lamberti told Epicenter at Search Marketing Expo in Santa Clara, California. "We've seen Google reduce its coverage [ads served per page] significantly over the last year, and it's by Google's design. Query growth [the percentage of search queries] is up 53 percent, year-over-year. [The] long-term prospects are extremely positive. I'm not saying that Google isn't experiencing macroeconomic issues, but I just don't think that report reflected that."
Lamberti's take on the report jibes with Citigroup's Mark Mahaney, who speculates that the drop in paid clicks is a combination of Google's attempts to improve the "lead quality for advertisers and the user experience for searches" and "a macroeconomic dampening of commercial queries by searchers."
Photo: Flickr/Yodel Anecdotal
