Posts Tagged ‘AdWords’

Google’s US Economic Impact…Exaggerated Warm-Fuzzy PR?

Wednesday, May 26th, 2010

Google recently released a report that indicates their total contribution to the US and individual state economies in 2009. What’s not surprising are the truly massive numbers, but what caught my attention are the “conservative assumptions” they rely on to get these numbers:

Businesses make an average of $2 in revenue for every $1 they spend on AdWords. (source) Now, Google has included the methodology behind this assumption but that sounds like a pretty bold statement to me. Are they implying that on average businesses receive a 100% ROI from AdWords?! It would seem so, as the entire report is on “Google’s US Economic Impact”. I’ve spoken with plenty of clients that have wasted hundreds or even thousands of dollars on AdWords with out a substantial return. This isn’t to say that AdWords doesn’t work, but generating a positive return from Adwords can be very challenging for the average small business owner.

Businesses receive an average of 5 clicks on their search results for every 1 click on their ads. (source) No complaints here! Many studies have shown that natural search engine results get many times more clicks than paid search results. The problem with this second “assumption” is the assumption they make afterward, stating this: “…clicks through search results may not be as commercially valuable as ad clicks, so we want to be conservative: we estimate that search clicks are about 70% as valuable as ad clicks.” Where does this estimation come from?! I’ve consistently seen comparable (if not better) conversion rates from natural search engine result clicks compared to PPC ad clicks.

Is Google just trying to create some feel-good, public relations during a time of otherwise economic downtime? I might be a little less skeptical if the report weren’t also accompanied by success stories from small business owners who have benefited from AdWords campaigns. Not to mention the video was published on YouTube on the “googlepublicpolicy” channel.

Here’s their presentation and summary of the report. You tell me…?