Google’s ad prices are dropping fast and YouTube might be to blame. Google recently held their quarterly earnings call for the first part of 2015 and revealed some surprising news. While profits, as always, are up for the search giant, ad prices are down. Revenue for Google rose 12% overall last year according to the Wall Street Journal, but the cost-per-click of a Google ad dropped 13%.
A drop in ad prices might not sound like the end of the world until you remember that ads are what pay the bills at Google. Selling advertising against search results, web sites, and YouTube videos is the real business that has made Google one of the world’s most profitable companies. Ad money is what lets Google pay for all the things we’ve gotten used to, like those shiny new YouTube Spaces, and the adsense checks that keep most YouTubers in business. What’s worse is that Google says YouTube is to blame for the drop in prices. Don’t panic though, according to Google this is all good news.
According to Google reps, that drop in prices is a sign that YouTube is growing. YouTube views are up significantly and as a result Google is selling more YouTube ads than ever. Sales are so good that YouTube can afford to offer ads at a reduced price while still making a tidy profit. Google attributes this to growth in viewership on the platform as well as a spike in the number of people viewing, rather than skipping, pre-roll ads. All of this means that YouTube can earn more money while charging less for ads, a move that will likely draw even more advertisers into the YouTube space.
Anyone with a mind for finances can view Google’s quarterly earnings report HERE, but Google famously refuses to break out specific results for YouTube or any of its other divisions, so we’ll all have to take their word on this one. The good news for YouTubers is that as long as the Google mothership is profitable, those AdSense checks will keep flowing and your CPM may even climb as a result of stronger ad sales. That, of course, means more videos for the rest of us.
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