Google is the world’s biggest advertising network. In 2011 it generated revenues of $37.9 billion of which over $4 billion was from the financial and insurance sector. Other 3 big spenders were the retailers and general merchandisers, the travel and tourism segment and jobs and education the big 4 accounting for 30% of Google’s revenue kitty.
The Google advertisement model is assisted by its targeted search that its spiders track from the millions of content pages that are created on the web each day. Since Google’s primary aim is in maximizing its ad revenue it creates a million search pages for every keyword typed fully knowing that 99.99 % of its users do not look beyond the first page results of Google search. So for every 1 page of advertisement on popular content it has a million pages of advertisement on content that only 1 in 10,000 people surf on the internet.
As per Forbes Adsense and Adwords are both proven money spinners accounting for 96% of Google’s revenue. The other newly developed businesses such as Android, You Tube, Google Display Network, Mobile Ads, Docs and Gmail only give Google an aura but generate only 4% of the revenue. Google’s social network Google + is once again proving a colossal failure and it is only a matter of time that it is withdrawn like its predecessors Google Buzz and Google Wave. This makes Google essentially a one trick pony focused on internet advertising that has created a $44 billion cash pile within a decade with some smart thinking that benefits only Google.
Now having established Google primarily as an ad firm let us compare Google to a brick and mortar ad agency that acts as a facilitator between the client and the consumer. Whereas for any normal brick and mortar business the publisher retains 85% of the ad revenue and the ad agency just 15% in the case of Google the publisher payout is reportedly less than 1% of the revenue stream.
Google Adsense is extremely stingy towards publishers paying a pittance on CPC basis. If the website is considered a publishers property Google is a tenant merchandiser that will pay a measly rent only when a client knocks at its door. However it remains parked at the publisher property 24×7 changing its product mix whenever its spiders and employees want.
Google CPC is not fair to the advertiser either. Its algorithm and functionality is opaque and nobody has real time data on the actual sales to the clicks generated. If you don’t know how to optimize your campaign you will never make any sales with the help of Adsense. Also if you use seemingly beneficial features like budget cap on Adwords the Google spider will optimize your campaign so that your ads appear for those last page placements which no one want to see. You could be easily dumped in a million pages of search results so that you stay within your budget but your campaign performs poorly !
I love to write on anything and everything under the sun from Project Management to Poetry, Economics to Travel and Technology. But most of all I love to write about our planet earth, about which you can read more in my blog Ecology to Economics. You may also meet me at http://www.twitter.com/ecothrust
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