How does google Make Money?
Today let’s talk about how Google makes their money and why you should know this. In other words, I’m going to explain Google’s business model. Understanding Google’s business model will help site owners improve their relationship with google and maybe increase their standing in the search results.
How Much Money does Google Make?
Google is owned by a parent company named Alphabet which has investment across many industries. In spite of owning several companies in many different industries including Google Alphabet makes as much as 85% of its revenue from advertising. That would account for roughly $116 billion according to Statista.com.
$116 Billion dollars must means Google controls a large portion of the market share. So it’s important to have the highest quality working relationship as website owners and content creators. That’s a lot of money, but how does Google make all its money in advertising? Well, let’s dive a little bit deeper. If you had to break it down, Google relies on three key players, users, businesses and publishers.
Everyone uses Google.
For users, Google has a simple, but powerful value proposition, you can find the answer to anything. If Google didn’t provided quality answers for users searches then the millions of people would use a different engine. Google has become a trusted source of information and gets billions of inquiries each year.
The secret of Google is how they organize the information that is available on the web. They make it simple for users to find. They can scan millions of webpages in less than a second and deliver that search to literally anyone. The information will be relevant to whatever search phrase that you use in the browser.
This simplify the users experience so people don’t have to use different search engines for different websites and answers. By providing this service Google doesn’t have to charge users to make money and consumers get a great tool for free. This creates an audience that Businesses would want to have access to and that’s what we will talk about next.
Google Revenue
For a businesses, the value proposition is very similar as the users. businesses get more sales through targeted ads and make more money. As Google makes the majority of its revenue through advertising. This is called advertising revenue, and it’s generated from two types of advertising, search ads and display ads.
What are Search ads?
Search ads are the Ads you see when you do a search on Google. These ads are great for businesses because they allow targeted people to see the Ads. Business will pay a certain amount to get in front of the right audience that they want to sell to. No matter what the user is searching for, a local business, a weight loss program, or a new car. The right search ads will present itself to the inquiry search.
Businesses pays Google for search advertising, and in return Google drives targeted customers to them.Have the right customer to sell to is great for a healthy business. The advertisers pay each time an Ad is clicked, this is the cost per click model.
What are display Ads?
By the way display Ads are a little different than Search Ads. Google want to show ads to users in as many places as they can. With all of Google properties their using this space to placed targeted ads based on the users history. Gmail, Google Maps, are some of the places you will see display ads.
They’re not just putting your auto insurance ad on a random site, they want to make sure it’s relevant to that site, The users also looking for the product or service that you’re selling, and for publishers, the value is the money that you can make by monetizing your content, your organic traffic through Google as well.
Website owners have the chance to insert Adsense Ads on their websites and make money every time someone clicks those ads. Mobile app developers have the chance to monetize their app in the same kind of way.
Not only that, but each time they’re putting out more and more content on Google, you can also make more money by getting more organic traffic, and some of those people will potentially click on your ads.
What’s next for Google
Over the last 10 years Google’s revenue has grown massively. The tech giant still reports revenue growth around 20%, and that’s kind of insane. Considering how big the company is and they’re already doing over $100 billion in revenue.
But Google doesn’t only want to rely on ads alone. They’ve gotten revenue from other important investments, also other subsidiaries that they’ve acquired and developed over the years. Going from 8 billion in 2009 to over 205 billion in 2018.
It went from 3.2% of the revenue in 2009 to over 15% in 2018, and that number is continually growing from 2019, 2020, and into 2021. Expect that number to continue to rise. Google’s app store alone has had revenue growth of over 27.3% over the previous year according to Sensor Tower.
Now, Alphabet is a massive corporation that encompasses everything from interneT, hot air balloons to self driving cars to Google Cloud. As long as people keep using Google, to find information online, their revenue growth will continue to increase. Which in turn, will help other areas of all the other business, plus you as a business owner. The more people Google attract to their ecosystem, the more potential you have to drive more people to your business from both paid listings and organic as well.
Understanding how much money does google make is important.
By understanding how much money Google makes will help content creators understand their projected growth. This partnership can be nurtured over time and strengthen for all of us. The users get the best and most accurate information, Google gets an audience, and content creators bridge the gap. Creating a win, win, win for all involved.