Google takes majority of £2bn online ad spend [BT broadband office]

Google takes majority of £2bn online ad spend

Posted 2 April 2007 at 9:58AM by Simon Dickson in Doing business online

Companies in the UK are now spending more of their advertising budgets online than in national newspapers, and the lion's share of that is going to Google.

A little over £2billion went on internet advertising in 2006, an increase of more than 40% on the previous year's figure, says the Internet Advertising Bureau. That's 11.4% of total advertising revenue, against 10.9% going into the national press.

Most of that £2bn is spent on paid-for search results, where Google is the undisputed king, and getting even stronger. 75% of the total spent on paid-for searches went to Google, up from 63% in 2005. Current estimates put Google's advertising income already well ahead of Channel 4, and catching up fast on ITV1.

Google's innovative 'Adwords' pay-per-click technique was launched in 2000, and suddenly made it realistic for even the smallest companies to advertise to a potential global audience. If you've ever used Google (and I can't believe I just typed that), you've almost certainly seen Adwords adverts at the top or on the right-hand side of your results page. Chances are, you've clicked on a few of them, too.

Companies basically bid against each other for their advert to be shown when a user searches for a certain word or phrase, or when a page displaying Google's adverts rates highly for that word. But they only pay when the user actually clicks on the advert, and they can specify a budget limit to keep their spend under control.

How much does a click cost? Well, as an example, to buy your way to the top of the search results for 'no win no fee' will take a bid of around £25 per click. A good position for 'estate agent Brighton' will require a bid of £1.70, but only 20p for 'estate agent Middlesbrough'.

If you've never investigated Google advertising, it's remarkably simple to get started, and gives you unprecedented flexibility going forward. You can keep adjusting your bid, or your budget, or the wording of your advert, until you're getting the results you want. For a very modest sum, maybe fifty quid, you can dip your toe in the water and see how it all works.

Tags: advertising, adwords, google, IAB

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Comments

1. At April 3, 2007 3:05 PM, Alex Bellinger wrote:

I'm no Adwords specialist, but I firmly believe that as larger businesses have diverted ad spend to Google, inflation has set in. It's now rather expensive for small businesses to get a good ROI. That's why I think it's important for any SME thinking about an Adwords campaign to seek professional advice. Ad hoc experimentation could prove costly.

2. At April 3, 2007 3:30 PM, Simon Dickson wrote:

I think you're right, Alex; as Adwords has proven its worth, more advertisers have come to it, and inevitably more bids means more expensive ads. But I think you can learn a lot about the system by spending a very small amount... certainly less than a typical consultant would charge for half a day's work. And the tools are there to limit your exposure.

3. At April 4, 2007 9:36 AM, Andy Bailess wrote:

We decided in 2005 to stop all media advertising including yellow pages, i would say i was more than concerned about dropping local advertising campaigns. All of our advertising budget goes on Google adwords with a massive increase in company turnover and profit,its not about spending thousands to get to the top of the search listings you just need to be clear on your key words and what you value them at.We are a small company and our web site is not even that good but it has raised our profile and profitability.

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