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Making Money the Google Way

2013 July 24
by Annie Wallace

howgooglemakesitsmoneyAt heart, Google is an Internet publisher. Although the content Google publishes is dynamically generated, prompted by users’ search queries, it’s still content.

It should come as no surprise then that Google makes its money the time-honored way that newspapers, magazines and many other content publishers do, through the sale of advertising. Google made 97 percent of its 2012 revenue from advertising, amounting to approximately $32.2 billion.

The Two Types of Search

When you type a search query into Google’s powerful search engine, you will typically get two sets of results. Organic search results are search engine results that are delivered because of their relevance to the terms a searcher typed into the search engine query box. In contrast, advertising search results are results that businesses have paid to get searchers to look at.

Google combines organic and advertising search results on their pages in a way that makes the types of content practically indistinguishable from one another. According to a recent study from the Pew Research Center, only 38 percent of all users understand that the highest ranked listings on their search results pages are often advertisements.

Adwords Versus Adsense

Google makes its money from two types of advertising:

Adwords: Adwords is a program that allows advertisers to place ads on search listing results pages. Advertisers use keywords that will trigger responses from search engine users. These keywords cost different amounts depending upon their likelihood of garnering a response from searchers. The five most popular keywords are “insurance,” “mortgage,” “attorney,” “credit” and “lawyer.”

Advertisers indicate what their daily budget for Google advertising is when they sign on for the program, and place a cost-per-click bid. Advertisers are only charged for their ads if users follow up on the advertisement and click on to the site. If you want to bid on the keyword “insurance,” for example, you will typically be paying $54.31 every time a prospective customer follows that lead on to your website.

Adsense: Adsense is a program that allow members of the Google Network to serve highly targeted advertisements on the sites of participating websites on either pay-for-click or per-impression basis. Google incorporates individual users’ search history into Adsense results to target them even more specifically. One of the most expensive Adsense campaigns of all time was the CBS March Madness on Demand, which cost the network $70 every time a user clicked through to the CBS site.

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