Bronte Media

While that sound you hear in the background is one hand patting my back, it is interesting to note a few things: Namely, the more you dig down into Google’s results the more you realize one thing: Comscore was largely right.

Look, it’s really hard for me to say. But I will. The firm was directionally correct. The problem with comscore still remains that it is horrible at trending year over year (and anything more than that). Quarter over quarter sequentially though, it’s pretty good.

When I saw an article that comScore was down 8% in after hours trading, I thought one thing: Take the 17% profits on my $0 opinion and plough them into comScore. Why? Well first of all comScore has always been wrong, so this wasn’t anything new. As soon as the dust settled, marketers, publishers and even investment analysts would realize they have very few alternatives and certainly no one would drop their subscription. But it seems that disappeared and the market returned to its senses and comScore is virtually unchanged at the opening.

Now back to Google. Why was everybody wrong? Well first of all everybody was guessing what nobody can know with any precision: Namely cost per click increases. Idiots like me can make guesses that Google has enough smarts to control that variable but that’s all they were: guesses.

The best data for cost per click increases is advertisers themselves and so because large ones use agencies then agencies make a good data source. But they are inherently tied to the mature categories and each has their own industry skews.

The second major factor was the fact that absolutely zero attention is paid to operations outside of the US, many where Google is a virtual monopoly (90%+ share).
A money quote from the WSJ’s earnings wrap:

“International was a big part of the surprise here,” said Rob Sanderson, Internet analyst with American Technology Research Inc.”

It’s quite surprising how little Americans care about other countries in general. And this bias plays out in the stock market. But Google now is an international company. The majority of its revenue is derived outside of the US. For the first time, international represented 51% of Google’s revenue this quarter.

In the US, Google earned $2.5bn in revenue. In the UK, revenue was $803m. And overseas the importance of supporting gravy train riders like AOL and ASK with 90%+ rev share deals is much less. So the profits of the company are even more skewed towards international. But you hear zero people talk about any countries outside of the US.

So in summary ‘the surprise’ was in things people had no idea about (pricing increases) or couldn’t be bothered with (international). And not the one thing that the spotlight shone brightest on: paid click volume and comScore’s estimates thereof.