Search ads up, average CPC down in 4th quarter

MediaPost story cites Google figures

[signor_john]

In an article [mediapost.com] dated today, January 20, MediaPost is reporting that search ads (the generic term for both search and "content network" ads) were up 43 percent in 4Q 2008 compared to the same quarter in 2007, and up 7.2 percent over the third quarter of this year. On the downside, the average CPC on every "major search platform" except MSN fell from 3Q to 4Q 2008; for Google, the average CPC dropped from $1.14 to 89 cents.

The article suggests that 4Q 2008 search-advertising figures are a "lagging indicator" because many advertiser budgets were already in place when the economic news turned bad a few months ago. It also explains a possible reason for the drop in average CPC: migration of large search advertisers' purchases from high-priced "awareness" terms to cheaper long-tail keyphrases.

[HuskyPup]

Interesting article...I'm guessing here since both your and my EPC is up whereas the average is down however we're both in relatively high-value product markets.

This could explain why some have seen such a drastic reduction in earnings if they are in lower-value product markets?

Would that be a reasonable and generalised quick assumption?

[jost]

My google adsense CPC and total profits dropped a stunning 50% in the last week. Im freaking out.

[signor_john]

Would that be a reasonable and generalised quick assumption?

Sounds reasonable to me. Averages are just averages, after all.

Also, sites whose AdSense ads are mostly "long tail" shouldn't be hurt (and might be helped) by greater demand for "long tail" keywords at the expense of demand for so-called money keywords.