![]() ![]() So if the cost per click is 50 cents, and the click-to-sale conversion rate is one in ten, the advertiser must sell their product for no less than $5 if they want to break even on their ad purchase. It might only be one click in ten that converts to a sale - this depends on how hot or cold the market is. ![]() Of course, not everyone who clicks an ad will also make a purchase. Paying cost-per-click means that rather than paying for the ad space itself, the winning advertiser pays a set amount to Google each time someone clicks on their ad. Advertisers bid on the maximum cost-per-click amount they’re willing to pay for their ad. It places ads in Google Search results, as well on mobile apps, webpages and videos, and is the main tool through which advertisers can reach customers via Google’s services.Įach time someone uses Google Search, or visits a website hosting ads through Google Ads, an automated ad auction takes place behind the scenes. Last year, Google Ads helped the market value of US company Alphabet (of which Google is a part) surge in excess of US$1 trillion, joining Apple and Microsoft. That something, it seems, was Google Ads. The reply was along the lines of “we’ll figure something out”. It may be apocryphal that in the early days of Google, when their only product was a revolutionary search engine, a business advisor is said to have asked the founders how they intended to make money. Google also highlighted a PwC report which estimated three-quarters of the tech giant’s advertising customers in Australia were small to medium-sized enterprises (SMEs) - and that Google’s services contributed A$2.4 billion to Australia’s economy each year.Ī Google spokesperson reaffirmed the company’s willingness to work with the ACCC to engender a “healthy ads ecosystem”, according to The Guardian. In response, Google has said the ACCC hasn’t properly taken into account other online advertising channels available to Australian advertisers, such as Facebook, Twitter and Snapchat. ![]() The full list of recommendations is aimed at limiting Google’s potentially monopolistic power in the digital advertising market. It also wants to impose rules on how user data is collected for digital advertising purposes, and how fees for services are calculated. The ACCC has recommended a new industry code to make the end-to-end ad process more transparent. ![]() In light of this estimate, it’s fair to say Google has the lion’s share of Australia’s digital advertising industry, which last year reached A$9.5 billion in spending. It is the benchmark by which advertisers know how many times an ad has been viewed. An “ad impression” is created when an ad is displayed on an app or webpage. The watchdog estimates 80–90% of all online ad impressions for Australia passed through at least one Google service in 2020. Google purchased YouTube in 2006 for US$1.65 billion. ![]()
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