96 percent of Google’s revenue is advertising, who buys it? (infographic) | Hacker News Reader

96 percent of Google’s revenue is advertising, who buys it? (infographic)

venturebeat.com

8 pointscoolrhymes6 comments

The cost per clicks are in the range of $2 all the way to $35! So the advertiser pays Google 30 bucks when one person clicks on their ad? That does not seem believable.

I've heard these numbers from multiple sources and I believe they are correct.

The highest costs per click listed in the infographic are for specific, long-tail keyword phrases (three or four words long). These keywords can convert at an absurdly high rate, which means that advertisers can spend a lot of money on clicks and still make a profit. And since Adwords works on a bidding system, the costs per click can get driven up pretty high in a competitive niche.

If you look at the keywords that have a cheaper cost per click, the keywords are fairly generic. That's because the conversion rate is lower for these keywords, so advertisers have to adjust their bids per click downward in order to make a profit. If the infographic showed keywords that are even more generic (e.g., one-word keyword phrases), you would see even lower costs per click.

That's interesting. Do you know How the bidding works for ads shown along with content? Like with blog posts, news stories, and in gmail. How do they bid on how close and likely to buy it is from the content?

I don't know exactly how the content matching algorithm works, but I know that search traffic produces a higher conversion rate than content. A big part of that is because a content click doesn't have the same intent to buy that a good search keyword does. For my business, content clicks convert about 1/3 as well as search clicks, so I just cut my content bid to 1/3 of my search bid, and that way I'm paying the same per customer regardless of the source.

Thanks! I guess my question was, how do you differentiate between context clicks? Say you are a health insurance company. You could bid 30 bucks for a search click on a search of "self employed health insurance plans", and say 1 dollar for a search click on a search of "medical bills". Fair enough.

Going with the 1/3rd analogy, it seems you should pay 10 bucks on a click with a blog post of someone comparing and sharing their experience of buying health insurance while freelancing. You should bid 33 cents per click along with news story about rising medical costs in the nation. But how do you differentiate between these two types of "specific" vs "general" contextual content while placing bids on contextual ads? Or is this functionality just missing in current bidding engines?

I'm aware of two ways to do this with the content network:

- Bid on specific placements. If there's a blog or blog post post I want my ad to appear on, I can tell Google that I want to raise my bid for that specific URL.

- Bid on specific keywords. For example, I might include the keyword phrase "freelancing health insurance personal experience" in my content campaign, and give it a higher bid price than the keyword "medical bills." In this regard, it's the same as with search, except that your ad is triggered based on Google's scan of the blog post, rather than what a searcher types into Google.

To get an idea of the keywords that Google might extract from a blog post, type its URL into the Google Keyword Tool:

https://adwords.google.com/o/Targeting/Explorer?__u=10000000...

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