After Google announced its "disappointing" 2012 third-quarter revenues of $10.8 billion via AdWords ads, WordStream released findings from an analysis of the economics of Google's AdWords platform in an attempt find out how Google makes more than $100 million a day with search advertising.
WordStream founder and CTO Larry Kim "looked at 2,600 AdWords advertising accounts—examining key metrics like the total number of number of clicks, impressions, costs (etc.) for all of the accounts in the date range of July 1, 2012 to September 30, 2012."
Among his findings: "Average costs per click (CPCs) have declined significantly...(-16.5% for Google Search, -18.2% for Google Display Network), while click-through rates (CTR) were mixed (-12.4% for Google Search, +13.8% for Google Display Network).
"Offsetting those declines are an impressive growth of ad impressions and clicks (clicks were up +21.6% for Google Search, +29.1% for Google Display Network), which more than made up for lost revenues."
Which industries spent the most on Google ads in 3Q12? The top 10 are as follows:
- Finance
- Travel
- Shopping
- Jobs and education
- Internet and telecommunications
- Computers and electronics
- Business and industrial
- Home and garden
- Autos and vehicles
- Beauty and fitness
To summarize its analysis, WordStream created the following infographic:
