What do you do the most on your devices? You are probably like me, at first, you did not even realise it but after reading this blog and thinking about it you will notice that actually searching for things online is one of the biggest activities that you undertake every single day either on your laptop, mobile phone or tablet. As seen on the diagram below, in 2012, over 90% of online operators used search engine. A search engine is a tool used to search for information. Baidu, a Chinese multinational technology company, is the most popular search engine in China. As well, it is one of Google’s biggest search engine competitors. Yet, the successful business corporation still is way behind Google, sitting on the sixth place on the list of the world’s most popular search engines. Google sits on first place, with 74.52% of the globe’s online searches being made through Google and 93% of mobile/table search being powered by Google. What does this really mean for Google?
More every day online search from us means more profit for Google. The concept of pay-per- click: PPC also referred as CPC: cost per click by some, is a way for businesses to buy visits to their websites instead of attempting to earn them organically or naturally. It is a heavily used internet marketing model in which a company that has placed an advertisement on a website (like Google) pays a sum of money to the host website (Google) whenever a user clicks on to the advertisement. The image below is an example of paid advertising ‘’Ad’’ vs organic advertising.
The aim of PPC is to subsequently increase sales for the business as advertised websites pop up on top of our Google’s search results page and are seen before the other business websites. So, how much profit does Google make out of this? A lot, if you ask me. Advertising is Google’s biggest money generator. In 2018, it was found that over 90% of Google’s revenue comes from its two main advertising or PPC platforms – AdWords and AdSense. The CPC varies between US$0.01 to US$100 and for insurance, loan or mortgage firms the cost is as much as US$54 per click. Giant retailers can spend up to $50 million per year on paid search on Google Ads and smaller business up to $100,000 per year. Thus generating a huge revenue for Google each year.
Truly, PPC is a very popular marketing tool and consequently, Google makes a huge profit out of it.
However, do you think that it is unfair for Google to charge companies for advertising? Mostly when it is largely viewed as a free organisation by most of its users.
MKTG1415_Digital Marketing 2018_Outlooks 
I don’t think it’s unfair for google to charge for advertising. The advertising pay’s for Google to operate and they provide companies with value in marketing their products and services.
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That is a valuable point you have there but don’t you think that their price is a little too high?
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I definitely think that it is unfair for google to charge companies for advertising. Just because someone clicks on the link to your website does not mean that they will go to purchase anything. Maybe google should implement a way that if an individual uses a google link to your website and he/she buys something then google should get pay some advertising commission.
I am totally against google’s pay per click adversing model.
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Exactly, meaning that companies get charged even if we do not buy their products. That’s unfair I think. Maybe Google should change it to ”charging companies when we buy from their website” instead of when we click their ads. Yes, that could be a better business model/initiative.
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I think Google has every right to charge for advertising, they’ve spent a long time building the credibility and recognition of their brand and need to pay for their business somehow.
They’re obviously doing something right if they can charge those advertising fees and still have a successful business.
I think that Google Analytics is a gold mine of information for Google’s customers (people advertising) and that by purchasing ad space/ad words customers get value back in the analytics behind their sites and campaigns.
Why do you believe that companies who pay to advertise on billboards shouldn’t pay to advertise on search engines?
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You raised a good point there, Alex. Google spends time and money into the services they create, therefore they should get some kind of revenue in return. But there are other ways of them making that money without hurting small firms. How about only charging companies that have started to be successful for PPC marketing, instead of all firms regardless of their size? Thats the thing, Google ”can charge those advertising fees and still have a successful business” because it is making money. However, small businesses will not survive, mostly when they pay for something that does not necessarily guarantee that those who click through their adds will buy their products.
Customers are definitely getting great value out of value and for free.
That’s different, you rarely see small or new businesses promote their products through billboard ads. They cannot afford it. Only big companies can. That method of marketing is way more expensive.
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I believe it is fair enough for Google to charge for a premium service like this. The only reason that some prices are so high is due to the bidding war companies enter to gain the #1 spot for that words search results. I think a much better question would be: Do you think its worth paying $50 per-click and risking paying more if your competitors decide to do so?
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I totally understand your point. Business is about making profit and revenue and therefore Google should too, through PPC marketing. The only issue is that their premium service does not necessarily guarantee profit for the businesses paying for it. People may click on ads but that doesn’t mean that we will buy anything from that company.
It won’t be worth it. Most of the time, a business paying $50 per-click won’t guarantee them more profit or even getting that $50 back through selling products. Most of us who click on the ad won’t buy things.
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Hey Mariama,
Yeah, I think its fine if Google charges businesses for advertising. As their using the already well-know platform as a means to get exposure and the level would not be possible on any other search engine. I’m just more curious on how well it works in the sense that people will actually click on the suggested/advertised link. Do you think PPC advertising has worked to increase consumers likelihood in clicking on a link to a site? (cause I generally ignore most things advertised to me unless I search it up myself and even then I won’t click on anything other than what I intended).
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True, companies will get exposure by having their websites popping up on top of our search results. However, only exposure is not enough for a company to last. It has to make profit.
That’s a good question. Same, I never click on search results that has ”Ad” next to them. I hate them. I always go for the first organic option. Nevertheless, it seems like it does because it has become very popular recently. The only thing is that Google will charge for every click but the business may not make money with every click. Some people they will click on the link but won’t buy things.
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I personally think especially from a small business perspective that it’s very unfair that they charge so much per click. It’s so hard to grow a business organically these days with the social media platforms and their algorithms. So these days I’d say organic growth is not an option. But I guess that’s how they are such a wealthy company.
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Same. I think that charging businesses mostly those that are fairly new in the market isn’t the way to go. You said that organic growth is not an option but do you think that small businesses will survive with PPC marketing being their only marketing option on Google or will most of them go out of business?
Yeah social media seems to be becoming a business in itself with all these platforms changing and creating rules that only aim at making them wealthier.
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