how-much-money-does-google-make-from-advertising

How much money does Google make from advertising?

Advertising RevenuesTotal RevenuesAdvertising as % of revenues
2020$146.9B$182.35B80.6%
2021$209.5b$257.48B81.4%
In 2021, Google generated $209.5 billion in revenues from advertising, which represented 81.4% of the total revenues, compared to the $147 billion in revenues, which represented 80.6% of revenues. Therefore, most of the revenues from Alphabet, the mother company of Google, come from advertising.
Google Advertising Revenue Breakdown2021
Google Search & other$148.95B
Google Network Members’$31.7B
YouTube ads$28.85B
Of the total $209 billion in revenues in advertising, $149 billion came from Google search, through AdWords. $31.7 billion came through network members’ websites, through AdSense, and almost $29 billion through YouTube Ads.

Related Business Models Case Studies

Google Business Model

how-does-google-make-money
Google (now Alphabet) primarily makes money through advertising. The Google search engine, while free, is monetized with paid advertising. In 2021 Google’s advertising generated over $209 billion (beyond Google Search, which comprises YouTube Ads and the Network Members Sites) compared to $257 billion in net sales. Advertising represented over 81% of net sales, followed by Google Cloud ($19 billion) and Google’s other revenue streams (Google Play, Pixel phones, and YouTube Premium).

Google Revenue Model

hidden-revenue-model-google
A hidden revenue business model is a pattern for revenue generation that keeps users out of the equation, so they don’t pay for the service or product offered. For instance, Google’s users don’t pay for the search engine. Instead, the revenue streams come from advertising money spent by businesses bidding on keywords.

Google Other Bets

google-bets
Of Google’s (Alphabet) over $257 billion revenues for 2021, Google also generated $753 million from a group of startup bets, which Google considers potential moonshots (companies that might open up new industries). Those Google’s bets also generated a loss for the company of over $5.2 billion. In short, Google is using the money generated by search and betting it on other innovative industries. 

Google Organizational Structure

google-organizational-structure
Google (Alphabet) has a cross-functional (team-based) organizational structure known as a matrix structure with some degree of flatness. Over the years, as the company scaled and it became a tech giant, its organizational structure is morphing more into a centralized organization.

How Big is Google

how-big-is-google
Google is an attention merchant that – in 2021 – generated $209 billion (over 81% of revenue) from ads (Google Search, YouTube Ads, and Network sites), followed by Google Play, Pixel phones, YouTube Premium (a $28 billion segment), and Google Cloud ($19 billion). Over $31.5 billion went toward R&D (12.3% of its revenues).

YouTube Business Model

how-does-youtube-make-money
YouTube was acquired for almost $1.7 billion in 2006 by Google. It makes money through advertising and subscription revenues. YouTube advertising network is part of Google Ads, generating more than $28B in revenue by 2021. YouTube also makes money with its paid memberships and premium content.

Google Traffic Acquisition Costs

what-is-google-tac
The traffic acquisition cost represents the expenses incurred by an internet company, like Google, to gain qualified traffic – on its pages – for monetization. Over the years, Google has been able to reduce its traffic acquisition costs and, in any case, keep it stable. In 2021 Google spent 21.75% of its total advertising revenues (over $45.56 billion) to guarantee its traffic on several desktop and mobile devices across the web.

Read Next: Google Business Model, How Does Google Make Money, Google Other Bets, Moonshot Thinking, YouTube Business Model.

Read Next:

Google make from advertising?">

About The Author

Scroll to Top
FourWeekMBA