Google – Show me the money

by Peter Young on October 27, 2010 · 0 comments

This has been one of the stories that has got me fascinated over the last couple of days, and was something we briefly covered on the State of Search Radioshow with Bas Van Den Beld on yesterdays show. When Google Instant launched just over a month ago (September the 8th to be precise) – many (including us here at Holistic) theorised as to the effect it would have on search behaviour and most of us suggested the biggest benefactor of Google Instant wouldn’t be the 2 seconds we would save searching but the revenue Google would make as a result of Google Instant…

… and it would appear we were right.

There have been a number of studies into the effect of Google Instant since its launched – many evaluating the effect on user phrase search behaviour – however the publication of research from a credible source such as Marin Software would certainly add a degree of authenticity and credibility to this research – given the sample size (a couple of hundred according to Marin) and the fact Marin manage circa $1.3 Billion pounds in paid search inventory.

The results were very interesting to say the least:

  • Ad Imperssions up by circa 9%
  • More importantly clicks up just under 6%
  • Costs up by just under 2%
  • CTR and CPC both down

Source: Search Engine Land

So whilst advertisers appear to be paying less per click, they are paying more in advertising based on the increased clicks coming through. Whilst many of the figures above would appear to be fairly minimal – one has to put this in context. A 2% increase in overall costs equates to around a 5% increase in revenue to Google every single day of the week. Over the course of the year – not taking into account any seasonality, you could be talking at about $250+ million in increased revenue to Google – and one has to remember that November/December (retail) and January (Travel) are bumper months for many sectors.

When one factors into play the recent announcement of Google Boost which is likely to mean yet more revenue to Google as they move to monetise localised search, one has to see the money-man at Google rubbing their hands at the prospect of the 2010/2011 figures.

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