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Frequently Asked Questions about the Top Google Advertisers Infographic

By Larry Kim January 26, 2012 Posted In: Google Comments: 7

Thanks to everyone who helped us get the news out about our infographic: What Industries Contribute to Google's Revenues. A special thank you to John Abell at Wired, Jennifer Booton at Fox Business, and John Letzing at the Wall Street Journal, Noam Cohen at the New York Times, Eric Mack at CNET, Jeff Haden at Inc, as well as the guys at Black Hat PPC! In this post, I’d like to address a few of the questions that came up in the comment sections of our blog and other sites that covered the news. Here it is again (click to enlarge), in case you missed it!

Google Revenues

And now for some Q&A’s about our Google Advertiser Infographic:

Where Is the Legal Industry? (i.e., Where Are My “Mesothelioma” Keywords?)

Here are the top 20 industries that spent the most on Google advertising last year.

  1. Finance & Insurance
  2. Retailers & General Merchandise
  3. Travel & Tourism
  4. Jobs & Education
  5. Home & Garden
  6. Vehicles
  7. Computers & Consumer Electronics
  8. Internet & Telecom
  9. Business & Industrial
  10. Occasions & Gifts
  11. News, Media & Publications
  12. Apparel & Jewelry
  13. Real Estate
  14. Health (excluding Heath Insurance)
  15. Law & Government
  16. Hobbies & Leisure
  17. Family & Community
  18. Dining & Nightlife
  19. Beauty & Personal Care
  20. Arts & Entertainment

The law and government sector came in at 15th place. While some of those keywords (mesothelioma lawsuit, etc.) are very expensive, they’re not very popular. In aggregate, they don’t generate as much revenue as, say, finance keywords, which are both popular and expensive.

The top 20 industries accounted for roughly 70% of Google’s revenues.

What about the other 30% of Revenues?

Approximately 4% of Google’s revenues are not related to advertising. It comes from interest on their big money pile, etc. And the other 26% came from hundreds of smaller subcategories representing a “long tail” of niche industries, with each industry occupying a smaller and smaller piece of the pie.

How did you calculate the Example Keyword Cost Per Clicks?

We used the Google Keyword Tool (the AdWords Traffic Estimator Service), set the targeting options to United States and English, and set the keywords to Broad Match. The displayed cost per click (CPC) was the estimated price for the top spot. So if you’re used to seeing lower CPCs for similar keywords, it’s probably because you’re targeting a different location or language, using different keyword match types, or not targeting the top spot (which can be significantly more expensive than say, the third spot).

Who actually clicks on Google ads?

We saw some comments along the lines of “I just can't believe they keep paying billions for those ads; I never click any of them, except sometimes by accident” and “I never see these ads.” This makes us wonder if people realize how much of the SERP is actually dedicated to sponsored results. Check out the below screenshot:

Google Ads

In this example, pretty much everything above the fold is an ad. You have probably clicked an ad that you didn’t realize was an ad. Also, if you’re reading tech publications, you’re probably not the average search engine user, but a little bit more sophisticated. We assure you, millions of people do click on ads, and that’s why PPC is profitable both for Google and the companies featured in our infographic. Lowe’s and State Farm are paying for those clicks, yes, but they are garnering enough new business from those clicks that it’s worth the cost.

How is this Different From your infographic on the Most Expensive Keywords?

Last year we did an analysis of the most expensive keywords on Google. In that study, we looked at just the top 10,000 most expensive keywords and then organized them into categories based on what words they had in common (such as “treatment,” “credit,” “degree” etc.). Overall, we were just trying to answer a common question: What are the most expensive keywords on Google AdWords in terms of cost per click?

This new research focused on a slightly different question: What industries spend the most on Google advertising? This was a far more comprehensive study – we took the top 10 million most popular keywords in 2011, figured out their estimated CPCs, then weighted and categorized the data into different industries. The results are different because some industries (such as retail) spend a lot in aggregate, but don’t pay a lot for each keyword.

Where did the Estimated Spend Data Come from?

We used data available from Spyfu.com, and we organized the domain names into categories using our own proprietary keyword categorization algorithms.

Why do the bars on the graph at the top have no relation to the rank, or amount of money spent? 

That’s not actually a bar graph. It’s just a top 10 list. The length of the “bars” corresponds to the number of characters in the industry name, not the amount they spent.

Should I be using AdWords?

Yesterday we wrote about what types of industries tend to see a lot of success with PPC advertising. But almost any kind of business can make PPC work for them.

I use AdWords. How Come I’m Not Seeing ROI?

We offer a free AdWords audit tool that does an instant review of your AdWords account. Run your account through the AdWords Performance Grader to see if you’re adhering to PPC best practices and how your performance compares to other advertisers in your spend range.

Any Other Questions?

If you have more questions about the infographic and how we arrived at these results, let us know in the comments!

Google Revenues

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Comments

Friday January 27, 2012

Bob (not verified) Said:

Who clicks on these ads?  I do.

Sometimes I am in the market to purchase a product and I *shudder*   look at advertising. And may even respond to it. For example, recently I was looking for a part to an old appliance. Amazon didn't carry it, so I searched on google for "Appliance name  parts" and clicked on some ads. Why not?  I'm looking to make a purchase and they are clearly looking to make a sale. I don't want a review of the appliance, I don't want someone's recipies using the appliance and I certainly don't want beat poetry about the appliance.

I consider myself a fairly sophisticated Internet user. I've been reading & contributing to online discussion groups at a low level since the late 70s (PLATO system) and remember USENET back when there was no group hierarchy.

Friday January 27, 2012

Elisa Gabbert Said:

Me too. So what? It's not like *I'm* paying for the click! I'm not sure why some people are snobby about them.

Monday January 30, 2012

br (not verified) Said:

I admit sometimes I click an ad just because I know it is going to cost that company some dough.

I always wanted to start a national "click all the ads you see" day to see if it bumped up Google's revenue.

 

Tuesday January 31, 2012

Elisa Gabbert Said:

Ha -- it appears Google is doing just fine without our help!

Wednesday November 14, 2012

Nik (not verified) Said:

Hello,

I am really curious how did you calculated the percentage of clicks that go to Paid listings vs Organic Listings. And how did you calculate the CTR of the top advertisers, in order to estimate their budget.

I think thats the most challenging question to tackle.

Thanks!

N.

Friday March 15, 2013

Lisa (not verified) Said:

Hi Larry nice article.  Can we get more detail on these metrics? 

I'd like to know which business categories spend the most on advertising, for instance:  Accounting, Banking, Catering, Dentists, etc. etc.

Average spend by those categories as well would be great.

Thanks 

 

 

 

Friday March 21, 2014

Anonymous (not verified) Said:

Why wasn't a demographic made for the rest (11-20)? Where can I find that information?

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