In Google’s quarterly earnings report, it was reported that some of the drop in profit was due to the cost per click of ads is continuing to drop. This drop in CPC prices is expected to continue in the coming years, and with Facebook likely launching their own mobile ad network, that price drop will likely accelerate. While this is giving Google some headaches, it could mean that marketers will be getting excellent deals for their ad buys.
Over the past several years, the ad market has been flooded with available advertising options. Google was once the only major player in the game, but now other options exist such. Big names like Apple, Twitter and now Facebook are offering ads, and even Yahoo & Bing are attempting to grow their market share. On top of that, there are dozens of small ad networks out there, each offering their own innovations to attract brand dollars.
Up until recently, however, the incredible growth in digital ad spend has been able to keep up with the growth in ad spots available. This has helped to keep the cost per click fairly stable. While growth is certainly continuing, the available ad spots are outpacing it, which is starting to force the price down for many markets.
Even brands that once considered CPC ads out of their reach may be able to consider buying in at the coming lower prices. Of course, this will not only help to fill the available ad spots, but it will also stabilize the CPC prices, and eventually, allow them to grow again. For the immediate future, however, marketers of all types should be looking to take advantage of the dropping prices of digital ads while they can.
