Last week, we ran a blog post that dealt with Google’s main revenue generator, Google AdWords. AdWords is the program that allows people and businesses to buy space near the top of the search engine results page, jumping over the websites fighting for organic hits to promote their own. While there are many benefits that come with tapping into the Google AdWords program, the advertisements might not net all the web traffic one would expect. Additionally, Bing’s counterpart to Google AdWords has proven itself to be a dark horse, and worthy of your firm’s marketing attention.
Nevertheless, Google AdWords makes up about 70% of Google’s advertising income, which totals 96% of the company’s overall revenue. AdWords might be one of the most lucrative business models in the world. But it’s not the only thing that Google does.
Nearly all of the remaining 30% of Google’s advertising revenue comes from its AdSense program. The AdSense program allows website owners to make money by leasing space on their site to Google ads. Google then connects these websites – now their advertising partners – with members of their Google AdWords program who are interested in not only marketing on Google’s search results pages, but also on Google’s partner websites, as well.
To fully understand how it all works, it’s helpful to break the program down into the two groups who use it: The website that’s leasing ad space, to become a Google advertising partner, and the advertiser buying that space.
AdSense: A Google Partner’s Perspective
From the perspective of the website leasing the ad space, Google’s AdSense program is as easy as selecting the types of ads you want to allow, and where they should go. Using these preferences, as well as the content on your site, Google turns to interested advertisers to find the kind of material that would be a good fit.
The ads that run on your website are often pay-per-click (PPC) ads, and you’ll get a cut from the revenue that they generate.
AdSense: An Advertiser’s Perspective
From the perspective of an advertiser, you encounter Google’s AdSense program through their AdWords experience. By allowing your ads to run with both Google and Google’s advertising partners, you’re letting your advertisements run on websites that are a part of Google AdSense.
Even though the advertisements aren’t on Google, proper, the experience is the same: Whenever someone clicks on one of your ads that’s been posted on a partner’s website, you’ll pay your PPC fee.
AdSense + AdWords = 96% of Google
Together, these two programs make up nearly the entirety of Google’s advertising income, which makes up nearly the entirety of Google’s total revenue.
So, there you have it. Now you know how Google makes money. Or, at least, you know how it makes 96% of it.