Thanks to a recently published list, we can now observe the sources of Google’s advertising revenue, one search result at a time.
Google doesn’t earn money from every search it processes. Google frequently states that it displays ads on only around 20 percent of searches, specifically those it labels as “commercial queries.” You can easily identify these by their nature. Searches like “US president in 1836” are not indicative of an intent to make a purchase, nor is a simple search for “Facebook” since it’s just a direct search for the platform itself.
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However, when you search for phrases like “best new car 2023” or “cheap flights to London,” many advertisers are eager to have their offerings prominently featured, which presents a lucrative opportunity for Google to generate revenue.
This week, during the US v. Google antitrust trial, we received a rare peek into a closely guarded secret: the search terms that generate the most revenue. The list specifically covers the week of September 22nd, 2018, and it consists solely of the top revenue-generating queries. Nevertheless, this is an unprecedented disclosure, and Judge Amit Mehta, who has been encouraging both parties throughout the trial to share more information and data, made the list public after extensive deliberation.
Now, here are the top 20 revenue-generating queries for that week:
- iphone 8
- iphone 8 plus
- auto insurance
- car insurance
- cheap flights
- car insurance quotes
- direct tv
- online colleges
- insurance quotes
- free credit report
- cheap car insurance
In my tally, there are three queries related to iPhones, which is logical considering the recent launch of the iPhone 8. Many retailers, carriers, and accessory manufacturers likely aimed to secure top positions in search results. The list also includes five queries related to insurance, an area that has historically been fiercely competitive and financially rewarding. For example, when I recently searched for “auto insurance,” I encountered four ads before seeing any regular search results.
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The list includes several pseudo-navigational queries, which may initially appear somewhat unusual. People searching for terms like “at&t,” “xfinity,” “hulu,” and “uber” are likely seeking direct access to these websites rather than exploring alternative products. However, Google has consistently encouraged brands to purchase advertising space for queries featuring their own names to safeguard their search result visibility from potential competitors. For instance, consider enterprise project management tools: when you search for “monday,” you’re presented with ads for Wrike, Asana, and Monday before you find the link to monday.com that you were originally seeking. Similarly, searching for “Asana” might display ads for both Monday.com and Asana before the standard asana.com link. While it can’t be proven, there’s a good chance that a significant portion of Google’s revenue from searches like “hulu” may have come from Hulu itself. I also suspect that Apple invested heavily to ensure that the Apple Store appeared at the top of those iPhone-related searches.
Broadly, these queries generating significant revenue are related to products or services with substantial customer acquisition expenses but long-term value. Car insurance, for instance, is a product people don’t switch frequently, making it highly valuable for companies like Allstate or State Farm to secure the first click when you search. The same holds true for cable providers, wireless carriers, and it seems, online universities. It seems that Google’s prime focus lies in the intersection of popular search queries within fiercely competitive and costly industries.
Google has traditionally maintained a high “cost per click,” which refers to the price advertisers pay when a user actually clicks on their ad in search results, particularly in this domain. Furthermore, the more specific the search term, the higher the cost. As an example, a 2020 Hubspot study revealed that a click from a “california auto accident lawyer” search would cost $475, while a “houston maritime attorney” search would set you back a staggering $1,090. Now, in comparison to the list mentioned earlier, a query like “auto insurance trucks omaha” might yield a higher per-click revenue compared to “auto insurance,” but the latter surely attracts significantly more searches, resulting in greater overall revenue.
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