Google Revenue : It is no big news that advertisements help Google in gaining revenue. However, it still is a question of how much and how. According to Statista.com, Alphabet – Google’s parent company, which owns many companies in different industries besides Google made around 116.32 Billion US Dollars which is 85 percent of their revenue.
According to Neil Patel, founder of Crazy Egg, 0Hello Bar and KISSmetrics, Google relies on three key players – Users, Businesses, and Publishers.
These are three factors that have been associated with each other for decades and it has always been the USERS who have gotten the benefit of all. There is no difference for Users even in the Google Business Model, they are on the top of getting the benefits out of this.
They have been given Free Search Engines, which Neil Patel describes as Value Proposition for them. Users get to search for anything and everything they want for free and free things have always been attractive and exciting.
The second key player, Businesses, gets their sales through targeted ads which again, Neil Patel describes it as Value Proposition for them. Now, these ads are of two types – Search Ads and Display Ads which helps Google to make revenue.
Search Ads come when you do a search for it on their engine and this makes it more important because businesses pay more to find the right audience.
The advertisers basically pay Google every time a visitor clicks on the link provided by them as it increases their traffic and also increases the probability of their sales.
Neil Patel describes this as the ‘Cost Per Click’ model. Now the Display ads can be displayed anywhere be in Gmail, Youtube, Google Adsense, and even Mobile Apps. Although, it is a tricky one as Google has to analyze all the data and post ads relevant to the user’s past search as well as the website they have opened. They make the ads relevant to the search which compels the user to click on it.
Now the Value Proposition for Publishers is that one can monetize their content whenever they want such as website owners can add Adsense ads and make money. One can also make money by gaining organic traffic on your content on google.
Although, Google doesn’t rely only on advertisements to make revenue, it has played a major role for them for their high revenue.