Google makes a ridiculous amount of money from its ads. Photo / 123RF
Google makes a ridiculous amount of money from its ads. Photo / 123RF
Do you never click on Google Ads?
Those ads at the top of the search results are ugly — and the intent is so obvious. You click it and then Google will know what you're interested in. Then it chases you to make money. Who wants to fall into that trap?
Clicking a Google Ad seems like a sucker move.
But the thing about suckers is there is one born every minute. Google put out its financial results last week and it made a shockingly large amount of money from ads. I really do mean shockingly.
They made US$27 billion ($38.2b) in ad revenue in just the last three months. That's US$300 million of revenue every single day, or around US$12.5m an hour every hour. Quite the money-maker.
What's more, the number of paid clicks on Google Ads is increasing fast. Paid clicks on Google Ads were 59 per cent higher than the same period last year.
All this makes Google crazily profitable. The Californian company saw US$31b in revenue come in during January, February and March, and costs were far lower. When all was said and done they made US$10.4b in profit before tax.
It is Google's money now
All that ad money used to support media. Newspapers, magazines and TV stations in particular have felt the loss of that advertising revenue in recent years, with some publications closing.
Advertising once supported local news. It's now going to Google instead, and is supporting its priorities. Some of the money supports things like driverless cars, which is honestly probably a pretty cool thing to support. But you do have to ask where that leaves the public who'd like to be informed.
Google made US$27 billion ($38.2b) in ad revenue in just the last three months. Photo / Supplied
Titan among titans?
Google's US$10.4b profit is enormous, soundly beating Amazon's US$2b and Facebook's US$4b. But it is not actually the best in tech. That honour goes to the behemoth that is Apple, which made US$20b in its most recent three-month period.
People really love iPhones, and Apple sells them for a lot more than they cost to make. The difference between Apple and Google is that while people are proud to own an iPhone and they wave them around, clicking Google Ads is our secret shame.
Not just search
It is definitely worth knowing that Google Ads are more than just the ads that show up during a Google search. Google serves us ads in Gmail and in YouTube (owned by Google), and also includes ads on lots of other websites that are provided by Google.
Any time you let one of those YouTube ads play without hitting skip, Google picks up a chunk of money. It can be quite a lot — over $1 in some cases. Video ads are a lot more lucrative than text ads, which is one reason the internet is now full of video streams.
I admit it. I click ads
If we look at this snapshot of things Google thinks I like, it's pretty damn accurate.
I shop online a lot. And that means I research products online a huge amount. And so do you, apparently, as Google wrote in a recent blogpost:
"Whether it's something major like a new car, or an everyday item like an umbrella, shoppers turn to Google for help deciding what to buy. Did you know that mobile searches on Google for 'best umbrella' have grown over 140 per cent in the past two years?"
The best time to advertise to someone is when they're already shopping. At that point, the advertising is actually less like an intrusion, and more like useful information. At that point, if someone makes me a good offer, I probably actually will click their ad.
When you're already shopping, Google can sell very high-value ads. Says Google:
"For example, an airline could reach people on YouTube who recently searched Google.com for 'flights to Hawaii'. We call this custom intent audiences."
This kind of ad is mostly a good thing, I think, right up until Google doesn't realise you've actually made the purchase. Then it follows you around the internet advertising the thing you've already got. I searched a lot for couches last December, bought two new ones, and I'm still getting ads for sofas of all varieties.
At moments like that I wish they actually knew more about me, not less.
