Although Google turned in a very strong earnings performance last quarter, one of the few troublesome spots was the continued decline in the company’s cost-per-click rate that it charges to advertisers. One of the reasons for this decline has undoubtably been that Google has had more difficulty generating ad revenues for its mobile websites and applications, which are quickly replacing its desktop websites as the most popular way to access its services.
As AllThingsD’s Peter Kafka notes, traffic from mobile devices now accounts for 40% of all YouTube traffic, up from 25% of all traffic in 2012 and just 6% of all traffic in 2011. This is a problem for Google, he writes, because “there are a bunch of different ways to buy ads on a conventional YouTube Web page, but only one way to do it on a YouTube app — a skippable ‘TrueView’ ad that viewers can turn off.” So unless Google changes around its YouTube app to make watching ads more compulsory, it may never again be the cash cow that it was in its pre-mobile heyday.
