google adwords spending 2017

How is Google Adwords making money in 2017?

Stefan Kingham

Granted, the title might surprise you. Rest assured though, we certainly don’t mean to question the power of Google Adwords!

What we’re really asking is “how much money is Google Adwords making on an annual basis and who’s contributing to that PPC revenue?”

To get straight to the point, revenues generated on Google Adwords accounted for 97% of Google’s overall income in 2015.

In total, 72 billion dollars worth of PPC advertisements were purchased in 2015 by a wide range of international companies aiming to drive more paid traffic to their websites.

Having initially launched with 350 selected partners, Google Adwords is now used by over 1.2 million advertisers and the company’s recent domination of the mobile search advertising market points to continued success for years to come.

As you’d expect though, only a handful of the 1.2 million aforementioned advertisers account for most of Google’s overall advertising revenues.

So, which companies are spending all their money on Google ads?

And which businesses are spending less in order to splash more elsewhere?

 

Where’s Google Adwords getting most of its revenue from?

 

Google doesn’t actually publicly release any info with regards to individual advertisers but a leaked internal Google document and data provided by SEM tool SEMRush have given us some valuable answers.

Back in 2013, Amazon was by far the biggest spender on Google Adwords with ad spending totalling 157.7 million US dollars.

Its nearest rival, Priceline Group (booking.com, agoda.com, KAYAK), spent over 82.3 million during the same period and recently announced they’d increased output on performance advertising by 27% between 2015 and 2016.

Seeing as Amazon has also invested more money in online advertising than ever before, it’s safe to imagine that Amazon and Priceline are still high up, if not the highest, on the Google Adwords spending chart.

As a result of this increase in PPC activity, Google’s advertising revenue is increasing very sharply.

To be precise, 79.4 billion dollars were generated by Google Adwords in 2016, as opposed to 72 billion in 2015. That’s an increase of over 10%.

 

Can any other online publishers compete with Google Adwords?

 

As big as Google Adwords may be, the online advertising industry is made up of several powerful players that have also contributed to the recent increase in industry-wide online advertising revenue.

To give you an idea of the industry’s recent growth, online advertising revenue in the U.S reached a record 59.6 billion dollars in 2015, up 20% from 2014.

 

US Internet Ad Revenue 2005-2015

US Internet Ad Revenue 2005-2015

 

Google and Facebook’s advertising efforts accounted for 64% of that revenue, although Google earned four times as much as Facebook.

With advertising revenues of approximately 80 million dollars worldwide, Google is so far crushing the rest of the competition and neither Facebook’s 28 billion nor Snapchat’s 400 million dollars in advertising revenue will get them worried anytime soon.

 

What difficulties is Google Adwords facing?

 

Earlier this year, having noticed that their ads were appearing next to rude, violent, and extremist videos on Youtube, over 250 brands pulled their spend from Google’s services, including Youtube and Google Adwords.

Disgusted that their ads are funding the videos’ creators, all sorts of angry advertisers, including Havas, L’Oréal, Honda, and the BBC, are gradually coming together to at least temporarily boycott Google.

But while these complications could admittedly decrease Google PPC spending in the short-term, Google Adwords has proven it’s robust enough to overcome the storm that’s coming.

PS: There’s nothing new about awkward ad misplacements. Look away now if you’re scared of ducks.

 

Misplaced Ad Example

Misplaced Ad Example

 

When it comes to paid clicks, never leave things to chance. Why risk seeing your ads in all the wrong places when you can get an expert to ensure they’re in front of the right target market?

Get in touch with the search engine experts at Sekkei Studio to find out how we can help you with your Google Adwords campaigns.

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Stefan Kingham
Stefan Kingham

Stefan is originally from the UK and holds a degree in international business. He's been working in digital marketing for almost 3 years and loves to motivate, create, innovate (and any other word ending in "ate"). Before joining Sekkei Studio, Stefan worked at a medical startup in Berlin, several record labels in London and Reykjavik and a social media agency in Beijing. When he's not reaching out for backlinks, Stefan likes to code, sing in the shower, and support his beloved AFC.

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5 Comments

  1. thank you for publishing is good article.

  2. Thanks for sharing your story. I’m so sorry to hear you’ve had such a negative experience advertising with Google. I’ve definitely heard similar stories before of advertisers feeling someone disheartened by fluctuations in the auction. I guess the sad news is that’s the nature of the game. Since it is an auction, the price you pay per click can vary slightly depending on who else is being entered into that auction. I’m wondering what bidding strategy you typically use? I would ALWAYS suggest bidding manually because that gives you the granular control to ensure Google will likely not charge you more then your max CPC price (although I believe they are aloud to charge you 20% more when needed so keeping that in mind id key). Make sure your daily budget is set to a reasonable number you won’t overspend.

    I hope that helps.

    Thanks,

  3. Just used this for my adwords campagin. Thanks guys

  4. Hello Stefan Kingham, thanks for publishing this post.
    Actually I am creating an info-graphics and presentation for PPC lead generation purpose. I was in search of AdWords raw data, I need to use on it and I got many of those from your content. I hope you won’t mind if I use couple of your researched data. I am going to mention this post link as external source of data on my info-graphics.

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