Google’s 2011 revenues were $37.9 billion last year and 96% of that money came from ads. Now I know what you are thinking. Where is all that money coming from? Well thankfully, the people at Wired put together an infographic that explains it all. Here are some highlights – a piece of the infographic and a link for the full graphic.
Finance and insurance totaled at $4B while retail and general merchandise was $2.8B and travel and tourism came in at $2.4B. Computers and consumer electronics came in at $2B.
Regarding individual companies the leading web retailer Amazon spent $55.3M followed by eBay at $42.8M and Macy’s at $35.6M.
On the education front, University of Phoenix spent $46.9M while ITT spent $29.9M.
On the telecom front AT&T was the leader at $40.8M while Verizon followed up at $22.9M. Go Daddy on the domain name front came in at $21.7M.
Another bit of information which is interesting has to do with the price per click for some of the top keywords. For example “Self-employed health insurance” costs a whopping $43.39 per click – that tells you a bit about how profitable that business is. A good basis for comparison may be “Barbie doll” which costs $1.30. It is worth mentioning that a typical Barbie Doll costs about $15-$20 meaning Google takes 5% or more of the total cost for this item - not for a sale but just a click.
Another highly priced term is “online video conferencing software” at $35.53. Seems like a lot of money but software is high-margin so this isn’t too surprising. I did a search on the term and the advertisers at the top were Nefsis, Arkadin, Gotomeeting, fuzebox, Cisco, Webex and Siemens Enterprise.
Perhaps most surprising is the term “custom business cards” which costs $13.83 per click. Since not all the people who click a link purchase it should come as a surprise that the company Vistaprint says in its ad that they will sell you 250 business cards for $10. To me the math doesn’t add up. – Perhaps they make it up in volume . I really hope so because Vistaprint spent $26.9M on Google last year.
The data clearly reminds us of something which may be forgotten – Google is not so much a tech company as a company which is feeding off of budgets which used to be dedicated to direct mail, coupons and newspaper circulars. Many of the companies spending the most money also spend a lot on billboard and TV advertising making Google just another mainstream outlet but with obviously increased measurability.
Going forward we can expect Google to try to push more of these advertisers from search click ads to YouTube – this is happening already but with Google’s recent announcement that they server 4B videos per day there is a massive amount of inventory to sell ads on. This is a natural progression for the company and explains why they have invested in new custom content video channels.