pixel

How Does Google Make Its Money?

Gary Green
Gary Green
November 12, 2021

It’s fair to say that Google has a number of ways to generate revenue far beyond selling stock shares or private investment.

In fact, Google uses many methods of partnering up with advertisers and merchants including Google Pay, Google AdSense, Google Analytics and Google Ads among others.

So, what should you know about these? And how does Google use them to make money? Let’s take a closer look.

The Google Business Model

Google processes more than a trillion searches each year, and each one of those searches gives Google the chance to display adverts and make more revenue. Around 83% of the company’s total revenue comes from advertisements since its main business model centres around online advertising. There are two types of advertising used by Google – brand advertising and performance advertising. Let’s look at both of these more carefully.

What Is Performance Advertising?

Adblocking is something that has had a dramatic effect on online advertising. Almost a fifth of people using the internet today now have ad blockers installed, and that means that a lot of money can be wasted when advertising online. Performance advertising is the solution. It allows advertisers to connect with users, all the while driving up measurable results.

Cost Per Click is a performance-based form of advertising that involves the company that is producing the advert only paying when customers take action. When links are clicked, they are tracked and CPC measures the average cost for each click over the period that the ad runs. The final CPC in Google AdWords is determined by the Quality Score of the advert as well as the company’s Ad Rank and maximum CPC bid.

What Is Brand Advertising?

This form of advertising helps to enhance the user’s awareness of advertisers’ services and products and increases their affinity to them. It uses text, videos, images and interactive ads across several devices.

Advertisers pay Google for CPM (cost per impression) as they’re keen to expand their audience reach. Advertisers typically bid for CPM when they target the Display Network since this allows them to improve and increase their brand’s visibility.

AdWords

Almost every time a Google Search is carried out, users see ads that dominate the top of the search results. These adverts are paid for. Every time a user clicks on the ad, Google earns some money. The amount they earn depends on the keyword’s value and the amount of competition.

Google Shopping enables consumers to find, compare and buy physical products from a range of retailers who’ve paid to have their products advertised. Advertisers use AdWords to set up Google shopping campaigns.

AdSense

Many online publishers sign up to show Google ads. Once they’ve signed up to AdSense, they add the code to their website and Google displays targeted adverts that are relevant to the users’ former searches as determined by its algorithms.

Admob

Advertisers sign up in order to display adverts on their apps. This is a way of Google helping app developers to earn more revenue from their applications.

YouTube

YouTube advert revenues have increased enormously in the past 4 years. There are almost 2 billion YouTube users out there and 500 hours of video content are uploaded each minute of the day. Over a billion hours of videos are watched on YouTube each day – that’s more than Facebook video and Netflix combined.

YouTube users see adverts before the beginning of videos and during them depending on the video’s length. Advertisers pay Google to have their video placed on the highest volume videos relating to their service or product.

Google Analytics

Although it isn’t an advertising tool, Google Analytics allows the metrics connected to websites to be analysed so that business decisions can be made more effectively. Invented back in 2006, it has empowered more data-driven decisions to be made about websites. The tool works by tracking all of the traffic on a specific social network, blog or website than giving the user reports which can be customized to suit the metrics that are most useful.

 Yes, it’s a free tool, however since it comes with excellent AdWords integration, it can help to increase revenue for adverts. This is because Google Analytics reports allow the results of AdWords services to be seen. Once users see how effective their use of AdWords is they will almost certainly want to spend more money on advertising and this is where Google can cash in.

Google’s Other Revenue Sources

Google owns a host of other products, projects and companies that also bring in vital revenue streams. Google Maps for example can earn money by partnering with organizations that can benefit from tracking and navigation. Trucking companies and ride-share companies are just two of the examples of organizations that pay Google for the use of their maps.

Google Drive is another well-known Google product that virtually everybody has used at some point. There is an upgraded version of Google Drive which is, of course, payable, thus bringing in more money for Google as a monthly fee comes in from every upgraded user.

Let’s not forget Android either. 2.5 billion devices around the world are using Android today and this popular and well-known operating system is an excellent revenue maker for Google, albeit an indirect one. Android allows Google to learn users’ mobile use patterns and Google Chrome can come preinstalled on devices so that users’ search habits can be discovered and used to Google’s advantage to show them tailored adverts.

Also, Google can sell users apps via the Play Store. Since 2008 it has been estimated that Google has made over $30 billion from Android.

With all of these revenue streams in mind, it’s very easy to see how Google is one of the world’s top 4 digital companies. By tapping into the power of advertising amongst other possibilities, Google has opened up a world of opportunities to make as much money as possible while offering services and products that are popular with consumers all over the globe.

At Key Business Marketing, we offer a range of services, including content creation, SEO, PPC and social media management. Get in touch with us today to discuss your marketing needs and unlock your business' potential.

Tell us about your project...
Fill in your details to get started and join over 50 businesses enjoying Key Business Marketing's expertise..
We adhere to strict GDPR rules and do not reveal or sell your data to any third-parties. For more, please read our Privacy Policy.
Latest Insights
March 7, 2022
4 Easy Ways To Unlock The Potential Of Untapped Keywords

There’s no question that successful SEO work depends largely on the keywords that you’re looking to...

March 3, 2022
Your Guide To Using A Free Keyword Generator

SEO’s foundation is keywords. If nobody’s looking for the things that you write about, there’s no...

January 13, 2022
The Top Traits And Skills Social Media Managers Need

It wasn’t so long ago that social media managers didn’t even exist. However, now, virtually all...

January 11, 2022
Top Free Tools For Keyword Research and SEO

It’s fair to say that keyword research is no longer only about “keywords”. Rather, it’s about...

January 6, 2022
A Content Marketing Report For B2B Businesses

An analysis of B2B companies was carried out to gain a better understanding of the ways...

January 4, 2022
A Marketer’s Guide To The Top Social Media Tools

It’s fair to say that social media can be a minefield. Yet it’s one that must...

December 30, 2021
SEO Techniques To Increase Brand Awareness And Organic Traffic

Raising brand awareness while driving up organic traffic to a website requires effective SEO practices. However,...

December 28, 2021
Four Definitive Real-World Examples Of Growth Hacking

There are some seriously impressive examples of growth hacking out there, executed by some leading organizations....

December 23, 2021
SEO Pros Reveal The Most Frustrating Practices In Web Design

SEO professionals often find practices in web design frustrating since they can interfere with their SEO...

View Our latest insights »
Get the latest digital marketing insights delivered straight to your inbox
We care about the protection of your data. No spam. Unsubscribe anytime.
02037 282 848
Mon-Fri 9am - 5.30pm
contact@keybusinessmarketing.co.uk
Digital marketing guidance at your fingertips
Copyright © 2022 KEY BM LTD Reg: E&W 11055943
linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram