In the last quarter, cost per click (CPC), which measures how much advertisers pay every time a user clicks on a Google ad, dropped 12% from the previous year.
That may be because Google added a bunch of new display inventory and hasn't gotten enough small and mid-size businesses on board to buy it, according to a person in the digital ad world.
In the meantime, Facebook is in the exact opposite situation: ad rates are rising because the company can't keep pace with advertising demand.
This matches what another source in the digital ad business told us: demand for Facebook ads is outstripping Facebook's inventory. Everybody wants to advertise on Facebook, this person said.
Facebook is planning to add mobile ads later this year, which could help the crunch (but drive CPCs down).
Either way, it looks like Facebook has quite a bit of runway to grow its ad revenues.
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