Google is an advertising company first and foremost, but the big revenue the company sees from ads is funding the rest of the company’s efforts — efforts that have brought us great products and services like Gmail, Google Maps and the company’s new Nexus 7 tablet. Search remains Google’s core product, of course, and countless businesses are sustained by traffic generated by Google searches. As such, it’s no mystery that advertising is Google’s biggest revenue generator by a landslide. Google has made moves recently to promote clicks on paid ads rather than organically surfaced results, and a new study reveals that Google’s efforts have had quite an impact.
Google’s net income popped in the first quarter this year, and a recent study conducted by online advertising consulting firm WordStream highlights one of several key factors responsible for the increase: Google is burying organic search results under a mountain of sponsored results, and the impact is huge.
For keyword searches with high commercial intent performed by U.S. Google users, sponsored results attracted the lion’s share of clicks by a huge margin — 64.6% of traffic from theses searches went to sponsored links while 35.4% when to organic links. WordStream defines searches with high commercial intent as searches where the user is looking to buy a product or service rather than answer a question. These searches are obviously far more important to businesses than any other type of search.
WordStream founder and chief technology officer Larry Kim says it’s too early to decide whether or not pay-per-click will render SEO obsolete for businesses hoping to generate significant revenue through Google searches, but the trend certainly seems to be shifting toward PPC in the U.S.
An infographic showcasing the findings of WordStream’s study follows below.