Demand for cheaper commercial pitches increased dramatically alongside the number of paid clicks, giving the company’s executives the obvious proof that advertisers are seeking the cheapest options. Despite this shift in advertisers’ behavior, the popularity of Google as a platform surged as well as its quarter earnings by an enormous 36% in the 2013’s third quarter. The advertisers’ demand for cheaper commercial pitches has proved immensely elastic! Decreases of 8% in average spend per advert lead to 26% increase in paid clicks; Google is laughing all the way to the bank.
Google model has proved an undoubted success with huge profits but what is amazing is the company’s capacity to feel and adapt to the changing demand in its market. Its direct market (the advertisers) loves the new formula; less outlay initially but more when its secondary market (the site user) click in vast numbers on these adverts. The advertisers know that their adverts are reaching its customers and willing to pay when they get evidence of that. Like a reward for performance! Incredibly clever and…effective!
This statement is in direct relation with Ashley Mui’s post about Google v/s Facebook as Ashley only stated the reasons of Google’s Ad success, my article supports her claims with the financial figures of revenue. Ashley equally agrees that Google succeeds in generating revenue due to the fact that Google’s advertisements are better when she says “Google advertisements are catered to what users are searching for”.
There is no doubt that Google will find more solutions to adapting its offering to smaller screens of mobile devices and further please customers. Its interest in acquiring the highly successful instachat shows that the company is further targeting the mobile devices market. All great news for investors as they see the company’s prospects rise and rise and earnings shoot to the roof!