After Google’s stock took a hit based on reports that Google ads are not being clicked on as much as they use to be, comScore is reporting today that the market may have got it wrong

the evidence suggests that the softness in Google’s paid click metrics is primarily a result of Google’s own quality initiatives that result in a reduction in the number of paid listings and, therefore, the opportunity for paid clicks to occur.

In part this might be right, but what’s being ignored by most is a little decision in November that changed the way Google ads worked:

Google has made a small change to AdSense that may make a big difference in cutting out errant clicks and even your AdSense revenue. They’ve redefined the clickable region for Google AdSense from the entire boxed region, to just the text link.

I’ve been hearing first hand reports since then from publishers who have experienced a big downturn in CTR and Adsense revenue since that change was implemented. Well regarded online marketer Jeremy Schoemaker even recently told me in a podcast that Adsense was dead as a monetization strategy. It’s happening to big sites and small sites. Markus Friend from Plenty of Fish, one of the more famed and bigger free-making money from Adsense sites (January):

The CTR on text ads declined about 60% in the last 2 months with googles changes, Image ads on the other hand stayed the same. If you take a screen shot of a text ad and then run it as an image ad it will get 2 times the click thru rate.

You read that right, image ads with double the CTR of Google ads when showing the exact same thing.

SEO BlackHat gets it right February 27:

4 months later, that little back and forth in the Google Rec Room shaved about $85 Billion (with a B) in market capitalization.

But it wasn’t as stupid an idea as it might seem. You see, Adsense works in a Quasi-market place environment. The market will bid up the cost per click once the adjustment for accidental clicks is readjusted. Right now, marketers should be getting a better value per click as a higher percentage of the clicks are “real” or intentional. That will lead to higher bids per click and ultimately should be close to a break even for GOOGs bottom line.

The short story: the changes to the clickable area in Google ads has resulted in a decline in accidental clicks, resulting in the overall click rate to decline. If Google is seeing a decline in CTR it’s at least in part due to its November decision.

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