Shares slipped 2% in after-hours trading Thursday after the search giant reported third-quarter sales that came up short of expectations, as well as another decline in the average amount paid by advertisers when a user clicks on an ad.
The figure, known as “cost per click,” dropped 2% versus a year ago.
The challenge for Google (Tech30) in the past few quarters has been convincing marketers to pay as much for mobile ads as they do for desktop ads, a task that’s become increasingly pressing as web usage shifts to smartphones.,
Mobile ads command lower prices than desktop ads, so Google’s average cost-per-click has fallen even as the number of clicks increases.
Google still reported $16.5 billion in sales for the third quarter, a 20% increase from a year ago, as web users clicked on 17% more ads than they did a year ago.
Google has a commanding position when it comes to mobile search, holding an 83% market share in the U.S. as of August, according to StatCounter.