How dis Google make money?
The Top 10 Industries That Spent Big On Google AdWords In 2011
- Finance & Insurance – $4.0 Billion (example keywords in this industry include: “self employed health insurance”, “cheap car insurance”, “credit cards for bad credit”)
- Retailers & General Merchandise – $2.8 Billion (example keywords in this industry include “zumba dance dvd”, “proform treadmill”, “weber grill accessories”)
- Travel & Tourism – $2.4 Billion (e.g. “new york hotels”, “plane tickets”, “rental car deals”)
- Jobs & Education – $2.2 Billion (e.g. “accredited online college degrees”, “online certificate programs”, “unemployment benefits”)
- Home & Garden— $2.1 Billion (e.g. “replacement windows cost”, “appliance repair”, “cabinet refacing”)
- Computer & Consumer Electronics – $2.0 Billion (“ink cartridges discount”, “pc memory”, “online video conferencing software”)
- Vehicles – $2.0 Billion (e.g “cheap hybrid cars”, “certified used cars”, “bridgestone tires”)
- Internet & Telecommunications – $1.7 Billion (“pre paid cell phones”, “domain registration”, “cable internet providers”)
- Business & Industrial – $1.6 Billion (“custom business cards”, “cheap office supplies”, “foam packing”)
- Occasions & Gifts – $1.2 Billion (“funeral flowers arrangements”, “flower delivery”, “wedding gift registry”)
Advertising revenues from these 10 industries accounted for 60% of Google’s 2011 revenues. The remaining $14.4 billion in advertiser revenues came from other industries. (Just 4% of Google’s revenues came from non-advertising-related sources.)
5 Things The Google Revenue Data Tells Us About The US Economy
Because everyone uses Google, and 3 million businesses advertise on Google, we can learn a lot about the state of the US economy from these results. Here are some of my conclusions.
Despite the recent financial meltdown, the finance and insurance industries were the biggest spenders of the year – and rest assured, finance companies wouldn’t be spending billions on Google advertising if they weren’t turning a profit from it. Insurance and loan companies were especially keen to acquire new customers through PPC – that’s because these industries make a killing off each new client.
What Recession? Consumerism Still Rampant
Despite a weak economy and high unemployment, Americans are still splurging on vacations and buying lots and lots of stuff (and we’re willing to refinance our homes and apply for new credit cards, despite bad credit, in order to get it). Amazon alone spent over $55 million on PPC ads in 2011, and that’s just what they spent on AdWords.
High Unemployment Creates Opportunities for Education, Jobs and Training
Unemployment hovered around 9% in 2011. Lots of people took this opportunity to seek out more education, and online degree programs are reaping the benefits. The University of Phoenix spent even more on AdWords than State Farm, the biggest spender in the Finance & Insurance industry.
Home & Garden Crushes Real Estate
A housing recovery is nowhere to be seen in Google’s 2011 revenues. Americans overwhelmingly spent more on fixing up the house or apartment they already owned rather than buying up.
Businesses Are Holding Back
Business and industrial spending was soft compared to other industries and relative to its overall share of the GDP. It seems that corporations are sitting on a lot of cash right now and are slow to invest.
Overall, from what I can see, a billion people are doing a billion searches on Google every day, looking to buy stuff, financial products, or to improve their skills. So while I’m no economist, my own prediction is that the US economy will be OK in 2012.
Google’s Top Revenue Sources: Survey Methodology
I compiled these revenue estimates by using our own trillion-keyword database and the Google Keyword Tool to determine the top 10 million most popular search queries in 2011, as well as their average cost per click prices as paid by advertisers. I used WordStream PPC technologies to categorize the huge keyword list by industry, such as “Finance & Insurance,” then applied a model that weighed the relative percentages of each industry’s revenue (keyword volume * average cost per click) to Google’s 2011 revenues, excluding non-advertising revenues. The top five advertisers in each industry and their estimated spend was obtained by using data from SpyFu.com, then applying the same categorization analysis.