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What Industries Contributed to Google's $37.9 Billion in 2011 Revenues?

January 23, 2012
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The Industries that Spent the Most on AdWords and What It Tells Us About the State of the US Economy

On the heels of Google’s “disappointing” earnings announcement last Thursday – they generated a whopping $37.9 billion in revenues in 2011 – we conducted our own analysis to determine the top 10 industries that spent the most money on Google advertising last year. The results are summarized in our Google revenues infographic, also shown below (click the image to enlarge).

Google AdWords Revenue:

We think that the results of our analysis reveal some surprising insights into the current state of the US economy – read on for more commentary.

Google Earnings

The Top 10 Industries that Spent Big on Google AdWords in 2011

  1. Finance & Insurance – $4.0 Billion (example keywords in this industry include: “self employed health insurance”, “cheap car insurance”, “credit cards for bad credit”)
  2. Retailers & General Merchandise – $2.8 Billion (example keywords in this industry include “zumba dance dvd”, “proform treadmill”, “weber grill accessories”)
  3. Travel & Tourism – $2.4 Billion (e.g. “new york hotels”, “plane tickets”, “rental car deals”)
  4. Jobs & Education – $2.2 Billion (e.g. “accredited online college degrees”, “online certificate programs”, “unemployment benefits”)
  5. Home & Garden— $2.1 Billion (e.g. “replacement windows cost”, “appliance repair”, “cabinet refacing”)
  6. Computer & Consumer Electronics – $2.0 Billion (“ink cartridges discount”, “pc memory”, “online video conferencing software”)
  7. Vehicles – $2.0 Billion (e.g “cheap hybrid cars”, “certified used cars”, “bridgestone tires”)
  8. Internet & Telecommunications – $1.7 Billion (“pre paid cell phones”, “domain registration”, “cable internet providers”)
  9. Business & Industrial – $1.6 Billion (“custom business cards”, “cheap office supplies”, “foam packing”)
  10. Occasions & Gifts – $1.2 Billion ("funeral flowers arrangements", "flower delivery", "wedding gift registry")

Advertising revenues from these 10 industries accounted for 60% of Google’s 2011 revenues. The remaining $14.4 billion in advertiser revenues came from other industries. (Just 4% of Google’s revenues came from non-advertising-related sources.)

5 Things the Google Revenue Data Tells Us About the US Economy

Because everyone uses Google, and 3 million businesses advertise on Google, we can learn a lot about the state of the US economy from these results. Here are some of my conclusions.

Occupy Wall Street Was Right?

Despite the recent financial meltdown, the finance and insurance industries were the biggest spenders of the year – and rest assured, finance companies wouldn’t be spending billions on Google advertising if they weren’t turning a profit from it. Insurance and loan companies were especially keen to acquire new customers through PPC – that’s because these industries make a killing off each new client.

What Recession? Consumerism Still Rampant

Despite a weak economy and high unemployment, Americans are still splurging on vacations and buying lots and lots of stuff (and we’re willing to refinance our homes and apply for new credit cards, despite bad credit, in order to get it). Amazon alone spent over $55 million on PPC ads in 2011, and that’s just what they spent on AdWords.

High Unemployment Creates Opportunities for Education, Jobs and Training

Unemployment hovered around 9% in 2011. Lots of people took this opportunity to seek out more education, and online degree programs are reaping the benefits. The University of Phoenix spent even more on AdWords than State Farm, the biggest spender in the Finance & Insurance industry.

Home & Garden Crushes Real Estate

A housing recovery is nowhere to be seen in Google’s 2011 revenues. Americans overwhelmingly spent more on fixing up the house or apartment they already owned rather than buying up.

Businesses Are Holding Back

Business and industrial spending was soft compared to other industries and relative to its overall share of the GDP. It seems that corporations are sitting on a lot of cash right now and are slow to invest.

Overall, from what I can see, a billion people are doing a billion searches on Google every day, looking to buy stuff, financial products, or to improve their skills. So while I’m no economist, my own prediction is that the US economy will be OK in 2012.

Google’s Top Revenue Sources: Survey Methodology

I compiled these revenue estimates by using our own trillion-keyword database and the Google Keyword Tool to determine the top 10 million most popular search queries in 2011, as well as their average cost per click prices as paid by advertisers. I used WordStream PPC technologies to categorize the huge keyword list by industry, such as "Finance & Insurance," then applied a model that weighed the relative percentages of each industry’s revenue (keyword volume * average cost per click) to Google’s 2011 revenues, excluding non-advertising revenues. The top five advertisers in each industry and their estimated spend was obtained by using data from SpyFu.com, then applying the same categorization analysis.

How to Grow Your Business in 2012 with PPC

If your business operates in any of these industries, there’s enormous potential for you here. Pay-per-click advertising is especially effective for businesses that:

  • Provide goods or services that people aren’t sure where to get (the stuff you used to look up in the yellow pages)
  • Have higher margins and longer customer lifetime values

2012 will be huge for Google advertising. Look for particular growth in areas including:

  • Local Search
  • Mobile Search
  • Social Media (The Google+ Project)
  • Google Display Network

If you’re already advertising on Google and would like to do better, get a free, instant AdWords account audit with the AdWords Performance Grader. It evaluates how well your account adheres to best practices and compares your performance to other advertisers with similar budgets.

What do you think about our data? Any surprises?

UPDATE

For more on this infographic, our research and methodology, check out my follow-up post, "Frequently asked questions about the Top Google Advertisers," then read our list of 26 crazy Google facts you didn't know.

Also read Elisa's post on what kinds of businesses should use PPC.

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Comments

Julie Greenberg
Jan 23, 2012

You don't have anything about legal in there (attorneys and lawyers).  Las year I believe it was #4 on the list.  Where are they this year and what happened?

Elisa Gabbert
Jan 23, 2012

Hi Julie, last year we reported on the most expensive keyword categories in AdWords. This time around we looked at which industries spend the most in aggregate -- a different question that led to different results. While a handful of "lawyer"/"attorney" keywords were way up there in terms of average cost per click, it appears that law firms as a whole do not spend as much on Google advertising as larger industries like finance and retail.

Sergey Rusak
Jan 24, 2012

Lawyers bid only on a few keywords which relate to their practice and geo area. For example several local lawyers bid a high price competing only for a few potential customers who got into a car accident in a sertain area. It generates only few clicks and the whole industry can not accumulate the same amount which comes from the retail or financial industry where companies bid on thousands and millions keywords selling different products and services.

Fernando Maciá
Jan 24, 2012

I miss not paying taxes in most European countries as one of the most important of Google's revenue sources. It is just not moral how much these guys are earning without contributing to our economy like the rest of the companies that operate here do.

Ink And Toner Guy
Jan 24, 2012

That's a lot of interesting data.  The only key word phrase that I can tell is a little out of place is the "ink cartridge discount" at $26 and change. The margin and average ticket for ink and toner ecommerce does not support anything close to that PPC price.  I am sure there can always be anomolies where some ad buyer made a bad buy but just wanted to point out that ink cartridges and shopping carts with ink cartridges don't get that kind of margin or avg ticket to warrant the PPC. Ink and Toner Guy

Anonymous
Jan 24, 2012

What is the source of this data? Adwords keyword tool and scraping SERPS or something more exact?The CPC's quoted seem to be much much higher than in reality.The data is still interesting from a comparative stand point.

Elisa Gabbert
Jan 24, 2012

We used our own keyword database, SpyFu and Google data, then did a bunch of number/data crunching to group the companies and keywords into industry categories. The keywords in the infographic, by the way, are not the most expensive in each industry, just some example keywords and representative CPCs. Thanks for coming by!

Brian
Jan 25, 2012

Hi Elisa,Nice article.It would be nice if you wrote a little about the uncertainties in you calculations. An example could be:It is a lot more difficult to find all the keywords within Travel & Tourism, then Finance & Insurance. Therefore we believe that Travel & Tourism is underestimated compared to Finance & Insurance.

Elisa Gabbert
Jan 26, 2012

Hi, Brian,Can you clarify why it's much harder to find travel and tourism keywords than finance keywords? Thanks! Do you mean because people might just be searching on, say, "Barbados" instead of "Barbados vacation"?

Jesse Kanclerz
Jan 24, 2012

Where's my company on this list?! Just kidding. But with with the growth I've seen in our paid search budget over the past few years it's plausible that we could make the list in a few years ;)

Elisa Gabbert
Jan 24, 2012

Ha ha, we'll be looking out for you!

Boise SEO
Jan 25, 2012

I love this Infographic!This is a very good representation of how much Google makes from PPC. It is hard to believe that so many companies pay so much money to be at the top of the search results. Crazy stuff.Shawn

Elisa Gabbert
Jan 25, 2012

Thanks Shawn! It's crazy indeed, some of these companies are spending well over 100K a day just on AdWords.

Vinny O'Hare
Jan 27, 2012

Very good list, did everyone give up on  mesothelioma lawyers as a keyword :)

Jonathan
Jan 28, 2012

Seems that the QuinnStreet & BankRate model of buying the keywords and developing the verticals is sweet.

Insurance Domain For Sale
Jan 28, 2012

Our greatest success has been in buying ads on Facebook; our Facebook leads are on average, 23% more responsive than Google leads.  

Shakil
Feb 18, 2012

Is this figures only related to USA or other countries? I think Google Adwords spenders mostly spend on USA visitors not on other countries visitors. 

Anonymous
Apr 23, 2012

i think you are right Mr. Shakil coz i noticed that nowadays CPC is getting lesser and lesser per day and we indian not getting revenues as per mentioned in this article :( really bad news for us :( 

Vishnudath
Feb 19, 2012

Hay! there is no adsense in your blog. then how you are earning ?

IPL Scores
Apr 05, 2012

This is a very good representation of how much Google makes from PPC. It is hard to believe that so many companies pay so much money to be at the top of the search results

Andrew
May 08, 2012

As a follow-up to the earlier question on legal, even though they are out of the top 10, did you estimate the total spending on the legal category? If not, do you have a sense for how much smaller legal is as a category?

Kulwant
May 29, 2012

Hmmm Google got a big number ......

Chullos
Jun 06, 2012

Simply I can't believe it, I had a basic idea about google advertising revenues, but this Infographic blow up my mind. It is hard to believe that only some companies (very big of course) can pay this huge money quantity to be at the top of the search results. 

Buy Articles
Jun 29, 2012

awesome report and inforgraphic, things are acutally looking, up, i was sure unemployement was higher than 9%, 9% doesnt seem tha bad, maybe its me. Happy 2012!!

Charlie Gilichibi
Jul 25, 2012

Brilliant investigative journalism. Also note Google makes $10.3 billion from its Affiliate Network of websites (http://investor.google.com/financial/tables.html). That's a whopping lot for a digital advertising media which has fundamental flaws in its algorithms. For example, a long page with Google ads hidden at the very bottom would have impressions counted for those advertisements even though they don’t appear on the viewable range of the browser and the surfer clicks away before reaching the end of the page.The other flaw emanates from Attribution Errors. Google manipulates its search algorithm so that in a month if an advert doesn't get 5 clicks out of 1,000 impressions, the key words chosen for that advertisement are killed by Google forcing the advertiser to select other keywords, however irrelevant they may be to the intent of the website advertisers just so that it can attract viewers to click on advertisement links. This is fundamentally flawed. Advertisers are in a bubble and can't figure out that at most times Google creates irrelevant traffic to their advertisements for keywords that people highly search and not from the intent of what type of viewers advertisers really seek.I am interested to see what more flaws others know about Google’s advertising algorithms and strategy.Email: charlie.gilichibi@gmail.com

Jay
Aug 21, 2012

#next_pages_container { width: 5px; hight: 5px; position: absolute; top: -100px; left: -100px; z-index: 2147483647 !important; }
This is completely a fictional set of numbers. The real numbers hint: the Top four in each category would have 50-70% of the total of that category. Not much else can I say. 

Anonymous
Sep 01, 2012

I agree, estimates here while interesting and infomative, seem to miss the boat when it comes to "largest advertisers".In particular, I see no mention of a publishing category. The yellow pages, after all, the actual business model of Google Adwords, are by my estimates, the largest category and contain the largest adwords spend. The yellow pages directories have been selling online as PPC packages and as cost per call pacakges along with their print product. One in particular is estimated to spend as much as $600 million per year with Google. Altogether this segment may account for as much as $1B in Google revenue. Even as the web kills the YP business, Google is making out like a bandit from the segment.   

rex oatis
Sep 11, 2012

Google manipulates its search algorithm so that in a month if an advert doesn't get 5 clicks out of 1,000 impressions, the key words chosen for that advertisement are killed by Google forcing the advertiser to select other keywords, however irrelevant they may be to the intent of the website advertisers just so that it can attract viewers to click on advertisement links.

zach
Oct 19, 2012

Awesome! I think this is really good for a lot of companies who are just getting into PPC or the digital world in general. If large companies like this are spending Millions on PPC it must be pulling some type of profit. If it works for them chances are it will work for you. You will not have the ability to spend as much but if you have an identical ad to an identical company what are the chances that you will have identical profits from those clicking on your ads? 

Dharam Chaudhari
Oct 23, 2012

Larry, amezing inspired story, I found ur post from seomoz. It's inspire us as small growing agency raising up our bars. Larry I haven reading your last few post on seomoz. It always the best. Good job dear

Submitshop
Oct 24, 2012

I also found ur post from seomoz, great work.

seobestpractices
Oct 24, 2012

A well researched easily digestable finding that makes compeling reading for anyone in the digital marketing market place. I look forward to your update of 2012 findings. 

VPr
Oct 29, 2012

Larry,You explained everything but i think you finsihed the excution part without exposing the secret.Distribution and timing is every important. you talked about timing of news but nothing about distribution of news.I have couple of Q's:1.how wall street, NYT CNN found your infographics and content?2. Have you used any Press release service or it just a infographics distribution in social meida.3. Have you just posted Inforgraphics in your blog and waited for Mediafirms to pick it up?   

iIrctc
Nov 09, 2012

I love this Infographic! This is a very good representation of how much Google makes from PPC. It is hard to believe that so many companies pay so much money to be at the top of the search results. Crazy stuff. IRCTC

marc
Dec 27, 2012

I have used google shopping for a few weeks and have contributed to the 37.9 billion in revenues.A lot of what I have read about PPC strategies is so hit and miss I almost wonder if google is intentionally sendingout erroneous info just to keep everyone guessing as to how to maximize returns on PPC.

Anonymous
Feb 20, 2013

Interesting statistic of where the PPC $$'s go. Is there one for 2012 as well ? It would be interesting to see a comparison across years to see which keywords keep their spot on the list based on $$ Spend. A study on identifying seasonal keywords and the PPC for these keywords, i.e increase in spending on PPC for Home Air conditioners closer to summer , and the months in which they peak would be interesting.

Anisha Dattani
Apr 09, 2013

Does anyone know if an updated version of these stats/ or another great infographic has been released?Would be great to have recent figures and comparisons.Anisha

Design Web
Aug 08, 2013

Good article. It was exactly the type of information I was looking for, people need to realize the value informationlike this holds. These industries offer awesome income potential.Regards,Aadil 

Reklama Google
Sep 04, 2013

The visitor, who visited web by clicking Google adwords advertisement - is not the same effectice as the visitor from organic flood.

Dan Carter
Dec 03, 2013

That's a lot of interesting data.  The only key word phrase that I can tell is a little out of place is the "ink cartridge discount" at $26 and change. The margin and average ticket for ink and toner ecommerce does not support anything close to that PPC price.  I am sure there can always be anomolies where some ad buyer made a bad buy but just wanted to point out that ink cartridges and shopping carts with ink cartridges don't get that kind of margin or avg ticket to warrant the PPC.

Edward
Jan 05, 2014

I will be trying PPC for my healthcare sites but I don't expect big results. And yes...those were big revenues for 2011. But what about 2013 now that 2014 is here?

Andy Kuiper
Jan 07, 2014

Soon, there may need to be an infographic clearly showing 'who doesn't' advertise with Google ;-)

Joe Mathieu
Mar 12, 2014

I'd love to see some 2013 data made into an infographic like this. Not to say that the top spenders wouldn't still be the top spenders, but I'd be interested to see if any new players entered the space and/or how much budget has fluctuated over time.

Naman
May 08, 2014

Great Article, thanks for sharing...

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