How does Google make its money? On the heels of Google’s blow-out Q2 2011 earnings announcement last week, we wanted to find out the most expensive keywords – what keywords demand the highest costs per click and are most competitive in terms of high search volume.
Since the vast majority of Google’s profits come from AdWords advertising, these high CPC keyword categories are responsible for a large part of Google’s profits. The results of our research are illustrated in an infographic of the most expensive keywords. (Click the image to enlarge the google adwords keywords infographic.)
The 20 most expensive keywords categories with the highest search volume (i.e. the most used keywords) and highest costs per click, thereby netting Google the most money, are:
We found that that 97% of Google’s revenue comes from advertising on Google sites. In the last four quarters alone (Q3 2010-Q2 2011), Google brought in $32.2 billion in total advertising revenue.
Google AdWords is a dynamic, auction-based marketplace where advertisers bid on keywords to compete for top ad placement. The minimum bid per keyword is 5 cents, but this research shows that in highly competitive categories, Google can make up to $50 per click from PPC keyword bids. Despite a diversified product portfolio, advertising on Google sites accounts for the vast majority of its billions in annual revenue.
The keyword categories with the highest volumes and costs represent businesses with very high lifetime customer value – in other words, these industries can afford to pay a lot to acquire a new customer. These most expensive keywords comprise businesses such as lawsuits, mortgage applications, and server hosting. Some high-volume keyword categories have lower CPCs because advertisers have slimmer margins to expend on PPC advertising.
You can find CPC estimates for keywords using a keyword tool like Keyword Planner or our own Free Keyword Tool.
We compiled data from our own trillion-keyword database and the Google Keyword Tool (one of many free Google Ads tools) to determine the top 10,000 most expensive English-language keywords over a 90-day period. This keyword list was then organized into categories by theme, such as “Insurance.” The largest keyword categories were determined by weighting the number of keywords within each category, as well as the estimated monthly search volume and average cost per click for each keyword.
If you or your client are struggling to compete in a high-volume, high-CPC keyword category such as the most expensive keywords identified in this study, the PPC best practices are the same as always, except of course, the stakes are 1000x higher if you’re paying on average $50 per click vs. $0.05 per click. Here are a few tips to consider:
Visit the “Where’s Google Making Its Money?” infographic for the full list of the top 20 most expensive Google CPC keyword categories and to embed the graphic on your own site.
Update (July 22, 2011): Check out the follow-up article to this study: Where’s Mesothelioma, What Is Cord Blood & Other FAQs About Our Most Expensive Keywords Study.
Update (July 27, 2011): Click here to download a PDF version of this infographic.
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