How do search engines like Google make money?

Written on 11 November, 2011 by Clancy Clarke
Categories: Pay Per Click, Search Engine Optimisation | Tags: advertising, google, pay per click, ppc, search engine optimisation, seo

Search engines make money by running search related ads alongside the organic search engine results. The search engine makes money every time someone clicks on one of these ads. This technique is known as pay-per-click advertising. Advertisers pay or bid for placements in the search results for keyword phrases of their choice. Each time a user clicks one of the ads in the search results it costs the advertiser – this payment is made directly to the search engine.

Search engines have a reason to maintain quality organic search results – the better the organic search results for a given query the more likely a user will return to use the search engine again. The more users a search engine has the larger the possible audience there is for the paid advertising and hence the more revenue the search engine receives.

It is in the search engines best interests to provide the best user experience – again the better the user experience, the more repeat searches and the more likely the user will click on an ad.

This pricing model might seem fairly harsh at first glance; however the situation is actually beneficial for most parties involved. Those websites that are not taking part in pay per click advertising have every opportunity to appear in the organic search results given their website is highly relevant to the search term and informative to the user. They can accomplish this by running a search engine optimisation campaign. For the users of the search engines, it encourages quality results and user experience and finally for the paid advertisers it provides an additional highly targeted marketing channel through pay-per-click advertising.