Henry Blodget of Silicon Valley Insider earlier today ran a report showing that Google’s advertising returns for the US market are slowing, while Google in Europe is continuing to surge.
According to measurements of “same-advertiser” spending, customers in the US increased their spending by 19% in February compared to 20% in January. This is compared to increased spending among UK same-advertisers 69% year over year, with the rest of Europe jumping by 100%. In December of 2007 the US was up 40% and the UK +44%. All figures show the UK market growing while US growth has slowed.
All of this data leads Mr. Blodget to call the USA growth “lousy” and the UK’s to be “strong”. While I certainly agree with his “strong” assertion pertaining to a rise in UK-based financial returns, I think the “lousy” comment for US-based numbers is a bit heavy-handed. Yes, growth has slowed this side of the Atlantic, but growth of 19% is still nothing to sneeze at. You also have to factor in how much longer Google has been in playing the US-based Internet landscape than Europe; massive growth can still be expected in the UK, while a sort of saturation point should be accounted for in the US.
It never ceases to amaze me how excessively disappointed some people get when looking at the less-than-spectacular rates of growth in business. So long as a business shows positive growth, it is still growth. In the brick-and-mortar department, you could see Wal-Mart still increase same store sales by 2 - 3% a month (an admirable trend), for example, yet investors will have found reason to expect more. Why didn’t they hit 4%? some might question.
When you are the largest competitor in a given category, you will naturally hit a wall where there is simply no more money or added customers to be found. This will happen to Google someday with ad buying. Companies only have so much advertising budget, to expect them to continue to grow with phenomenal strength for so many years is ridiculous.
This isn’t even to mention the fact that the US appears to be entering a recession (or has already done so), a situation in which most any company posting positive double-digit gains is something to be heralded as good news. Not deemed as “lousy.”
A comment on this post counts as an entry in our Mashable Rocks contest!
User comment: By: beccaMy sentiments exactly.
Visit here to subscribe to these commentsUser comment: By: Ben FeldmanDoes anyone think this is surprising? Of course Google's growth in the US is slowing; I would bet that Google is closest to ubiquity in the US than in any other country. As more and more people switch to using Google, there's fewer and fewer people to switch (and generally these people haven't switched for a reason), meaning lousier growth. Europe as a whole hasn't reached that point yet, but it looks like it will eventually, and then we'll see a story about how Google's growth in Europe is now slowing and Google's Asia operations are booming.