How Does Google Make Money From You?
First, let me tell you how much money Google makes.
“‘OK. How much?’”
Statistics provided by statista.com
For those of you that hate graphs, that’s £109.22 billion ($136.22 billion) in 2018 alone. But, how did they do that?
What Is The Income Source Of Google?
There is a saying among Internet Marketers; “If you’re not paying for it, you are the product”.
Google is an advertising agency, and YOU are the product. Let me spell this out as clearly as I can.
- They sell information about you, to their customers.
- You are not their customer.
- You use their services for free.
- You are a user.
If you are expecting a child, the first to know isn’t your Mum – it’s Google. If you searched for a cure for baldness, or how to kill your boss – well you just asked Google. The big G now knows everything from your shoe size to where you live. G knows and stores this information.
It sells them to their customers. Their customers can be the largest corporations in the world to small family businesses. This is where Google ads comes in. And Google Ads makes up about 80 – 90% of their revenue. Here is a link from ABC’s (the company that owns Google) website, showing their 2019 Third Quarter results: https://abc.xyz/investor/static/pdf/2019Q3_alphabet_earnings_release.pdf?cache=d41c776
Now, when consumers do a search, let’s say – for a bathroom sink, Google will retrieve a list of websites that sell bathroom sinks. Thousands and thousands of company’s websites will be displayed for free (and hence why it is important to have a great website design).
As in Google received no money for this wonderful service. However, what everyone wants though, is to rank at the very top of that list. After all, most consumers don’t even bother going to page 2 of the search results. Websites listed on the first page normally get all the sales. However, to get to the very top of the list, businesses have to pay Google. At the very top of that list are the Google Ads.
Every time a consumer clicks on an Ad, the business who made the Ad has to make a payment to Google. If it is ignored, then no payment is made.
Each click can start from under £1 to £50 – or more.
What Does Google Do?
Google Search Revenue
When you use these ‘free’ services the big ‘G’ learns more about you.
- What interests you have.
- Where you live.
- When you are at work.
- Who your friends are.
- And A LOT more.
With this information, it can target adverts to make them more specific to your profile. The more specific the adverts, the more likely you will click on them. The more adverts you click on, the more money ‘G’ gets. Not to mention, that these services grow their brand trust.
Er well – Yes.
But we have other articles, that will help with that…