Let's admit it, we all use Google services in some way or the other. Be it Google mail, Google Drive, Youtube, Maps, Google play store or simple Google search engine, the multiple services have taken a significant place in day-to-day lives.
We, at times, find it hard, to not to use the search engine as we have all the answers at our fingertips. But, we never pay Google for this life and time-saving services. Then how does Google make money? Or is it free? And how can Google help your business grow?
Google's parent company, Alphabet, revealed that in the 2017 fiscal year the revenue earned accounted for USD 110 billion.
“If you are not paying for the product, then you are the product.”
Google earns over 90% of its revenue through ads. About 1 billion searches are made on Google every day, while it serves billions of ads alongside. In the fourth quarter of 2017, Google earned revenue of USD 31 billion, of which ads contributed USD 27.2 billion. Hence, it is not that you are paying directly, but the way you are paying.
The actual product of Google is the largest pool of users and extensive data on consumer behavior. The data is then used to match the companies with potential consumers by serving the ads they might want to click.
Google’s advertising business stands on three main pillars: AdWords, AdSense, and AdMob. The online habits of users on YouTube and Gmail are used to create a consumer behavior profile. The surfing habits are also followed by Google Analytics and AdSense to track the interest out of search.
What makes Google stand out is its ability to show personalized ads to the people who might likely click it.
Hence, you can run ads on Google, generate revenue and attract great traffic to your website by opting Google ad services.
Being a little realistic about the success, time-frame, effort, and investment, anyone will prefer instant result. As Google Adwords allow multiple keywords at a time and gives visibility to the ads on the top, it works faster than SEO to attract traffic instantly. However, organic method to gain traffic is a long-term process and beneficial too. If you want to go for a budget-friendly way, then you can opt Gmail ads as well, as they are low cost.
Each time you search for something an ad auction is performed, besides the degree of relativeness, to decide which ads will be shown in higher scale. The auction, which is based on the idea of Vickery auction, is called generalized second-price auction. Unlike the normal bidding, which go-on with endless rounds and smallest bids, Google’s ad auction is a single round auction. The highest bid wins but pays the price of second highest bid to prove that the strategy behind the auction is to pay the true value of your product. Each winner pays the bid of the next highest bid. Say ‘A’ bids USD 2 for search slot, and ‘B’ bids USD 3. Then the winner of the single round bid is ‘B,’ but will pay the bid of ‘A,’ that is USD 2.
As Google charges on per click basis, it makes no money if a user does not click on the ads. This is where ad quality comes into the picture; a variable is determined by the number of clicks. Hence, more clicks lead to better quality. This plays an important role in order of ad appearance; Google demotes ads of poor quality.
When it comes to traditional advertising, it is difficult to measure the performance of the ads featured in newspapers, commercials, billboards, and brochures. They are also costlier than Google AdWords. But in a bid to reach customers, you have no control over the budget, which burns a hole in your pocket. And in the end, you cannot determine what was worth paying. On the other hand, Google ads allow you to measure your performance. You can easily know who clicked your ad, traffic generated through the ads, conversions, leads, and top keyword.
The process seems quite a daunting task, but the results are instant and transparent, making it worth every penny spent on Google ads.
If you want to reach a bigger audience, create brand awareness then let BluBrandz help, you start running with your first Google ad.