Google Inc (NASDAQ:GOOG) is announcing their Q2 2012 earnings results today. Despite many side projects, Google remains today primarily an advertising business, with approximately 97% of revenues coming from its core search engine advertising business. As such, Google Inc (NASDAQ:GOOG)'s earnings are largely dependent on key advertising metrics such as the cost-per-click (CPC) and click-through rates (CTR) of search advertisements.
A new search marketing advertising study compiled by WordStream, Inc., a provider of search engine marketing software for small and medium-sized businesses, shows that the CTR of paid search advertisements on Google now outnumbers clicks on “free” organic search result listings by nearly a 2:1 ratio for high commercial intent keyword searches conducted in the US. (These are keyword searches wherein the user appears to be looking to buy a product or service.)
The full results of the new study on Google ads are published in infographic form.
High Commercial Intent Keyword Searches
In search marketing, different types of keywords have different value to businesses. For example, high commercial intent keywords (such as “exercise bike”) and branded keyword searches (such as “thinkpad x1”) are worth much more to businesses than pure informational keyword searches (such as “why do cats purr”). While unpaid organic clicks still account for the majority of clicks for searches conducted on Google, the new study from WordStream is the first to illustrate that for the types keywords that are most valuable to businesses in the US, pay-per-click (PPC) advertisements account for the lion’s share of clicks by nearly a 2:1 margin.
Other Study Highlights
The study also found that:
- 45.5% of Google Users can’t differentiate between paid advertisements and organic search listings
- The click-through-rates on a search result page for a commercial keyword search is up to 600 times higher than the average Facebook page
- Ads take up 85.2% of the above-the-fold search listing space on a Google search results page for keywords with high commercial intent.