Google and It’s Advertisement Business
Google, one of the world’s most valuable companies, generated $183 billion in revenue in 2020. What is more interesting is that more than 80% of its revenue comes from advertisements.
The details of how the business work is through Google’s search engine. An advertiser can put up a bid that determines whether their advertisement will appear on Google’s search page. This bid amount is often determined by how much an advertisement benefits an advertiser, but also dependent on whether or not the industry is competitive. This range can vary greatly, from hundreds of dollars a click for an attorney advertisement to a few dollars for a click for a house cleaning advertisement.
Google’s engine creates more personalized advertisements based on the audience’s language and positions as well. So not every single advertisement will appear on a user’s feed; only those that are relevant will. This technological feature allows advertisers to target specific audiences that will actually have a higher likelihood of clicking on their advertisement, which could generate revenue for both parties. Another interesting way for Google to generate revenue is through posting advertisements on Google Maps. Basically, Google offers advertisers “pins” of their business locations on Google Maps. Businesses can purchase advertisements in terms of how prominent their location shows up on the map, and a more prominent location could lead to customers visiting it more. For example, a restaurant could advertise its location on Google Maps to attract customers who use it, thus generating more income.
The advertisement that is hosted on Google is not just beneficial to Google. A similar tech giant, Amazon, also benefits from this online advertisement system. This is because a lot of the advertisement that is hosted on Google leads to sites like Amazon, instead of other general sites such as Google.
The tech boom creates various ways for companies to generate revenue that was previously not possible. I believe that as time goes on, this will be even more prominent. Although we currently only see big companies on the news for their high revenues, it is possible that anyone could benefit from advertising anything on Google, not just businesses. I look forward to the day that smaller businesses or individuals can utilize Google’s advertisement scheme to send out their products to relevant audiences in an accessible way.
Link:https://www.cnbc.com/2021/05/18/how-does-google-make-money-advertising-business-breakdown-.html