When you get the results of your Google search, do you click on the sponsored link (the top one) or the regular link (just below it)?

I asked this at a lunch the other day, and some people said they deliberately click the non-sponsored link.

Personally, I always click the sponsored link, because I like Google, and I'm happy for them to get the money.

But the question remains - do they deserve that money?

Let's say I owned an online cat store called TopCats. I buy search advertising for my store, on Google. The next day, someone searches for TopCats, sees the sponsored link, clicks on it, then buys a cat from my store. Google can then tell me "See, search advertising works brilliantly!"

But here's the thing - that person was going to buy a cat from me anyway.

Yes, I understand if someone searches for "buy high-quality cats online" it would be worth me showing them an ad for TopCats. But when someone searches for my store by name... aren't Google simply doing the equivalent of slapping an ad on my front door? Sure, people see it, and then afterwards buy, so it might look effective. But the only people who see the ad are the ones who were going in anyway.

This phenomenon is apparently a real thing, called 'endogeneity'. If you want to read more about it, there's more in an article by The Atlantic here.

Just to be clear, I like Google a lot. I use their product multiple times a day, and I think it's awesome. It's fairly certain I couldn't live without it. Since I'm a sucker for gadgets, I'll probably even give Google Glass a go. And since I'm shit at driving, I'm really looking forward to driverless cars.

So I'm not wanting to criticise Google, in any way. They should get lots of money for what they do. Lots.

But $60 billion* a year - is that fair?

*Google's revenue was $15.4 billion in the most recently-announced quarter. More than 90% of this revenue comes from advertising. The company doesn't break out search from display and other forms of advertising, but it's safe to say that search is big.

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