Who's doing all that clicking and tapping?
April 15, 2014 11:29 PM   Subscribe

How does Google make so much money on advertising when everyone I know says they rarely click/tap on search ads and display ads?

Do I just happen not to know the type of people who are inclined to look at ads, or is there some fundamental aspect of how Google's advertising business works that I don't understand?
posted by Dansaman to Computers & Internet (24 answers total) 3 users marked this as a favorite
People with knowledge of the actual numbers will surely chime in, but the main idea is that displaying an ad is cheap, and the number of ads displayed is huge: the advertisers are actually going for a pretty low number of clicks per impression to break even. They are also interested in other things such as keeping their brand in the public consciousness, and crowding out the competition.

To see this in perspective, web advertising can be much more effective than TV or radio: every TV spot is shown to millions of people and costs a ton of money, but you have probably never seen someone immediately get off the couch and go to the store to buy the product after watching one. With web advertising, even the few people that click on the ads are much easier to convert to actual sales.
posted by Dr Dracator at 11:58 PM on April 15, 2014

I think you might be getting your anecdata from small slice of internet users who are more technically inclined and advertising savvy than most. When I worked at a publicly accessible library, I helped many people who didn't realize the difference between "sponsored links" and the top hits of the search result. They would often click on the very top big blue link when looking for things like school applications or tax forms, leading them to sketchy middlemen instead of the actual resources they needed.

I think search-based advertising is also so lucrative because in theory companies are willing to pay big bucks for access to consumers who are already looking for things relating to the company's product. As an example, wikipedia claims ads on keywords related to asbestos and mesothelioma can cost $65 dollars per click due to the high expected returns on asbestos related litigation.
posted by arcolz at 12:04 AM on April 16, 2014 [5 favorites]

How does Google make so much money on advertising when everyone I know says they rarely click/tap on search ads and display ads?

The main innovation of google was the ability to display relevant ads to people. So even if a small fraction of people click on the ads, the ones that do are going to spend money. So that makes the value of each click very high to the advertisers. Google also offers a lot of metrics and tracking tools so you can see the advertising working. People spend money on google ads because they make money from google ads, it's really that simple.
posted by empath at 12:16 AM on April 16, 2014

People click on search ads all the time. I bet you do too. They are often so relevant and useful that your brain processes them as search results.
posted by w0mbat at 12:42 AM on April 16, 2014 [1 favorite]

Anyone using a tablet or touchscreen phone is going to click on ads fairly regularly-- just not on purpose.
posted by Pallas Athena at 12:52 AM on April 16, 2014 [16 favorites]

Even if you don't click on an ad it may still have some value to the advertiser to show it to you. You don't click on a billboard. That's why they talk in terms of "impressions" a lot of the time.

But yeah it's also possible that you're just in a group who isn't really making google any money. I know I am - I use google a lot, but I also use adblock and and skip over sponsored search results even if they look like what I want. They don't have to make money from everyone, just a lot of people. And it's also not always the case that advertising is effective - sometimes advertisers overpay.
posted by aubilenon at 1:07 AM on April 16, 2014

It depends on what you are searching for. Just yesterday I was looking for someone to repair some window blinds, and I did click on Google Ads. Why would I not?

So, I don't think it is about the type of people you know. It is about the type of things people are searching for. Most of my searches also do not involve clicking on ads.
posted by vivekspace at 2:04 AM on April 16, 2014

Confirmation bias and a small sample size? Billions of ad impressions occur every day across Google's network. A larger percentage than you think of people click those ads. Sometimes they may not realize that the top "result" on Google is an ad, sometimes, it's a relevant ad on their content network, but people are clicking.

Hell, plenty of people will literally "search" for the exact website they want (like "target"), and click the sponsored ad for Target.com to get there. That's HOW THEY INTERNET.

Now that's not a particularly great return for Target, but they probably don't want someone else grabbing their name space, so they secure ads for their own name and consider it part of the cost of doing business.
posted by disillusioned at 2:19 AM on April 16, 2014 [8 favorites]

The number of people running searches is huge so "rarely" is more than good enough. Here are basic Analytics stats from the monthly report Google just mailed me for a client:

23,459 impressions; 833 clicks; €78.42 cost.

So the average cost per click was €0.09 and the click through rate was 3.55%. These are unusually cheap ads with an unusually high click-thru rate (norm is under 2%) but you can see that it's all about small percentages of a large number of impressions.

PS: Unlike disillusioned's suggestion, we do not run ads for this client's name. If you search Client Name, they have the #1 search result but it is not paid for.
posted by DarlingBri at 3:15 AM on April 16, 2014 [1 favorite]

I get the impression that Google ads are racing to the bottom in terms of scamminess (one weird trick, mlm, recurring payments, pretend viruses, actual spyware…). I don't think personalisation is very helpful when all the alternatives are crap. Most ad-supported sites are actually supported by the naive and uneducated people who fall for scams.
posted by Tobu at 3:20 AM on April 16, 2014

The glittering quartet of the words "Insurance", "Loans", "Mortgage" and "Attorney" - all with a CPC cost of over $40. These words are each the front door for billion dollar industries where over 95% of clients come in via Google's front door (or not at all). These are all, also, industries that are happy to pay commissions to those who bring them in customers. See "Google's 20 most expensive keywords". Finally these are industries where there is little potential for differentiation using niche keywords.
posted by rongorongo at 3:46 AM on April 16, 2014 [2 favorites]

> As an example, wikipedia claims ads on keywords related to asbestos and mesothelioma can cost $65 dollars per click due to the high expected returns on asbestos related litigation.

This deserves clarification.

Ad placement is done through bidding. The higher you bid, the more favorable your placement. So those $65/click ads for mesothelioma are a kind of second- or third-order consequence of asbestos-related cancer litigation being profitable. You can certainly pay less for mesothelioma-related ads, but you will appear second or third when Google places a matched ad somewhere, or be the first one dropped when there's not enough room.

Or, in other words, the ads target a small demographic of very interested people in a very lucrative market. If there were a lot of idle mis-clicks on those ads, the bids on them would plummet dramatically regardless of whether this particular industry was profitable, because even posh lawyers' offices know better than to drop tens of thousands of dollars a month on fruitless advertising.
posted by ardgedee at 4:51 AM on April 16, 2014

To directly answer the question: I'll confess that sometimes when I'm searching on a topic involving source material I don't particularly like (eg, a business known for unsavory practices), I'll click on their ad in the Google search results page rather than their link at the top of the search results simply out of a petty "fuck that guy" sentiment. Because I get what I wanted and made them pay, I dunno, $0.14843 or whatever for my effort.
posted by ardgedee at 4:54 AM on April 16, 2014 [2 favorites]

People do click the ads. Recently I was doing a lot of research for my company about replacing the Point of Sale register system, so for a while I saw lots of ads related to POS. Clicked through on two different companies on YouTube, because I was interested in information on their product.

Now that decision has largely been made, but for a while my ads will continue to reflect those searches. I'm fairly internet savvy, and Google ads are for the most part accurate to what I'm working on at the time. I don't often click, but when I do there is a reason.
posted by shinynewnick at 5:01 AM on April 16, 2014 [1 favorite]

I've annoyingly not saved the link, but I've read a small percentage of people click a LOT, and most people click rarely or never.
posted by curious_yellow at 5:04 AM on April 16, 2014

My boss is 40, has been using the internet for work stuff since 1997, and is in a technical field. He clicks the sponsored links. EVERY fucking time. It's so painful watching him google things. He does exactly what disillusioned describes above.

I think your polling pool is small and special.
posted by phunniemee at 6:28 AM on April 16, 2014 [2 favorites]

Also there will be people who you ask "do you click on internet ads?" and they will picture like one of those "CLICK THE MONKEY TO WIN AN IPAD" or "FREE INTERNET BINGO CASINO $$$" banners and reply "haha no way!" when actually they click on the sponsored Google links all the time (as described above), not realising those are "ads".
posted by EndsOfInvention at 6:49 AM on April 16, 2014 [1 favorite]

I've puzzled about this as well... But I realized the same could be said about television...

When was the last time you saw a TV ad and ran out to buy a Mazda or an ING bank account or Geico insurance?

Never, right?

But you know about those things because of advertising and, when you start looking for one of those products the brands are already waiting on a shelf in your brain somewhere ready to go.

Advertising works because you don't know its working.
posted by cacofonie at 6:59 AM on April 16, 2014 [1 favorite]

1) There is a sweet spot when you run a large campaign where you want to pay per "impression" or paying per how many people SEE the ad, not CLICK the ad. Therefore, Google gets money from the person who runs the ad regardless of if you click it.

2) As stated above, many people click sponsored links at the top of google searches. There are also ads on the side of google searches, along with ads that follow you around on web pages in the "Ads by Google" sections.

3) It's a HUGE industry and Google is basically the top online ad service. Anyone with money can setup a Google ad.

4) People run them on their own sites to make money. I have ads on my website and bring in a little bit of money each month. So if my tiny site with not many visitors gets commission each month on ads, then people are clicking them. Usually these ads are relevant to you because of your search terms and web surfing patterns.
posted by Crystalinne at 7:05 AM on April 16, 2014

A big thing is also "reminder ads": If you visit a Company X's website to look at Product A but leave before placing an order, Company X will see this, and slap you with a cookie. After that you'll see banner ads on other sites for Company X, sometimes specifically showing Product A. The idea is to lodge themselves in your brain so that you'll eventually circle around back to Company X's website and buy that Product A you were looking for. Company X will pay a bundle for this because it's hyper-targeted toward customers with an active interest in Product A, steers them away from competitors (if the customer is in the market for a Product A and is trying to decide between getting it from Company X, Y, or Z), and lets them clinch the sale.
posted by Smallpox at 7:08 AM on April 16, 2014 [3 favorites]

Online advertising works based on small percentages, essentially. A good clickthrough rate would be a single digit percent or even a fraction of a percent unless you're doing very targeted ads (which you should be, obviously). So think of 100 people you know. I'm willing to bet one or two of them are dumb enough to click an ad, yeah?

That and the number of people convinced they are stone cold hyper logical decisionmakers that marketing doesn't work on is infinitely higher than the number of stone cold hyper logical decisionmakers that marketing actually doesn't work on. Those are actually our best customers because they will do amazing mental backflips to convince themselves they made the best possible decision rather than admit advertising works on them.
posted by Ghostride The Whip at 7:37 AM on April 16, 2014 [2 favorites]

I run a site that uses ads. People click on them all the time. They also click on my in-house ads, which are pretty clearly ads and not in a tricky place. Given a lot of people buy what I advertise, I can conclude that many people are interested in the ads. I am also a marketing consultant and have run online ad campaigns for many organizations, including to advertise jobs in Corrections. I believe that client has now built quite a channel around online job ads - and that's for a major government employer. So they do work, especially if you create a compelling pitch, a good call to action and you target the ad - and people will convert if your landing page is well put together.
posted by acoutu at 9:25 AM on April 16, 2014

rongorongo: See "Google's 20 most expensive keywords".

Very illuminating. Some expected stuff (Insurance, Loans, Mortgage), some surprises (Donate? Software??), and it absolutely enrages me that the top 20 is rounded out by "Rehab", "Treatment", and "Cord Blood".
posted by RedOrGreen at 9:48 AM on April 16, 2014

Anyone using a tablet or touchscreen phone is going to click on ads fairly regularly-- just not on purpose.

This is late, but I remember thinking the same thing, then later read some headline about how companies actually factor in the fact that people might click on a link in error (I guess if they immediately go back?) and they wouldn't get credit for a page view.

But if you're talking about people who click by mistake but actually stay on an advertised page and are interested, then yeah, I guess that happens.
posted by TheSecretDecoderRing at 2:24 AM on April 18, 2014

« Older Making A (Not Too Heavy or Bulky) Statement   |   Impending pet death (probably). How do I take care... Newer »
This thread is closed to new comments.