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Google Claims $80 Billion of Economic Impact on U.S. Economy

google economic impact Google Claims $80 Billion of Economic Impact on U.S. Economy

Google recently released the annual Economic Impact Report, which attempts to estimate the amount of revenue that Google drives to U.S. businesses each year. As a result of AdWords and AdSense, Google claims to have driven a whopping $80 billion of economic activity last year.

Margo Georgiadis, Google’s VP of America Sales, posted the following to the Google blog:

“In 2011, Google’s search and advertising tools helped provide $80 billion of economic activity for 1.8 million advertisers, website publishers, and non-profits across the U.S. You can see the state-by-state breakdown on our economic impact website. It’s a fact that the Internet is creating jobs and helping the American economy grow. And we’re proud to be a part of that process.”

Although the $80 billion figure is quite impressive, it takes some interesting math to reach that number. Google estimates that every business in the United States that uses AdWords will earn $2 of revenue for every $1 spent on AdWords. In addition, Google believes that businesses will receive five organic clicks for every single paid click and that these clicks will also generate approximately $2 in revenue per visitor. However, for the sake of the report, they reduced the profitability of an organic website visitor to $1.40, which is 70% of the initial figure. Below is Google’s formula for the economic impact of the AdWords program:

AdWords ROI Formula: 2(spend) + .7 x 5 x 2(spend) – (spend) = 8(spend)

Since Google began releasing this financial data in 2009, the search giant has steadily increased its economic impact each year:

2009 – $54 Billion
2010 – $64 Billion
2011 – $80 Billion

The $80 billion estimate does not include Google Maps, YouTube, Google’s own hiring, or the potential savings for consumers that use Google products.

Google indicates that $8 of profit per $1 spent on AdWords is a conservative estimate. Do you agree?

Sources Include: Official Google BlogEconomic Impact Site

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David Angotti

After successfully founding and exiting an educational startup in 2009, I began helping companies with business development, search engine marketing (SEM), search engine optimization (SEO), conversion rate optimization (CRO), online marketing, mergers and acquisition, product development, and branding. Now, I am focused on a new startup in the travel and tourism market niche.
0c15e0b63451c1383c65f73c9084b747 64 Google Claims $80 Billion of Economic Impact on U.S. Economy

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2 thoughts on “Google Claims $80 Billion of Economic Impact on U.S. Economy

  1. It would be interesting to see what Google’s global economic impact is, including their other businesses – David, would you know where to source this data?