Google’s Share of U.S. Online Ads Hits 40 Percent
by Erick Schonfeld on October 5, 2007

Google is really growing into its gorillahood. A quick calculation (via HipMojo), based on the latest figures from the Interactive Advertising Bureau, shows that in the first half of 2007 Google commanded a 40 percent market share of all online advertising in the U.S. (Okay, I’m rounding up. It was really 39.8 percent). But that compares to a 34.6 percent share in the first half of 2006, based on IAB data for that period. Here’s the math:

$3.98 billion (Google’s U.S. revenues in the first half of 2007)/$9.99 billion (IAB’s estimate of total U.S. online ad revenue in 1H07) = 39.8 percent.

For the first half of 2006 the numbers are:

$2.732 billion (Google’s U.S. revenues in 1H06)/ $7.9 billion (IAB’s estimate of U.S. online ad revenues in 1H06) = 34.6 percent.

Update: As one commenter points out below, this means Google is out-pacing the growth of online advertising by a wide margin. Total online advertising revenues grew 26.5 percent year-over-year, while Google’s ad revenues grew 45.7 percent.

All numbers come from Google earnings releases and IAB.

Responses (Trackback URL)

Comments

What will happen when they include the numbers from DoubleClick? Monopoly?

 

Google has enough power to make this an even larger number. Kind of scary to think that one company controls 40% of online advertising.

 

Erick,

Here are two pieces of information that will help your analysis.

1) Do a YOY comparison - Is 34.6% to 39.8% growth rate (comes to around 15%) means Google is slowing down or still growing at the same rate?

2) List sources for your data: Unless you do so, I really cannot validate your statements and have no trust in them.

- B

 

Sources are IAB, which I link to, and Google earnings releases:

http://investor.google.com/earnings.html

 

We are ‘hell-bent’ on succeeding in ads …

We just had our FAD (Financial Analysts Day) in Redmond, Wash; and what a FAD we had!
I threw out a couple of crowd pleasing zingers, like I tend to do and the crowd of employees went crazy!

Doing my patented “preacher karate chop” in the air, I whipped arround and screamed:”We are hell-bent and determined to allocate the talent! the resources! the money! the innovation to absolutely become a powerhouse in the ad business! Say yeeees!”
Ray Ozzie and Bill did a little dance in the aisle.

I then did a linebacker stance and exclaimed:
“We are tackling disruptive technology changes head-on, namely the shift to advertising-supported Web services!” Then I stomped on a styrofoam Google logo!
The crowd was going ape!

I wound it up with the old pep-rally arm wave while chanting:
“We are going to be an advertising com-pa-ny,
and we are going to be a devices com-pa-ny!”
The whole crowd joined in;
“We are going to be an advertising com-pa-ny,
and we are going to be a devices com-pa-ny!”
“We are going to be an advertising com-pa-ny,
and we are going to be a devices com-pa-ny!”
“We are going to be an advertising com-pa-ny,
and we are going to be a devices com-pa-ny!”

I did my running skip (high fiving everyone) off stage …..
Whew! That was some FAD!

 

Nothing new here… the juggernaut continues forward.

 

Well, internet monopoly is legal. There’s no law that can stop online monopoly.

When you write boardwalk or parkplace startup company. I bet Microsoft, Google, Yahoo, Ebay, Ask, Facebook… They will start buying your domain land & idea for billions $$$… What would you do?

Would you sell your boardwalk or keep it?

I’ll say keep it..
You don’t need IPO…
You don’t need to win lottery…
You have Microsoft, Google, Yahoo, Ebay, Facebook, Amazon… They all want it!!! You have corporate lawyers to walk at your door and make you sign billion dollar contract.

It is VERY VERY VERY VERY VERY scary for entrepreneurs…
Life is short… You want longer life…

 

@ #3.) You are a dumb ass.

 

Google Ads make up 40% of our revenue scheme as well.

Good to know we’re using the right monetizer.

Mark from ClutterMe

 

Goes hand in hand with the Privacy Conference article in the BBC about collecting user behavior (data):
http://news.bbc.co.uk/2/hi/technology/7026641.stm

 

More fun with numbers: from Erick’s data, total online advertising revenues grew 26.5 percent year over year, while Google’s ad revenues grew 45.7 percent.

 

Until google realize they dont need you anymore… that would be really scary…
When that happen, you will say, oh Microsoft why I leave you!! :-)

 

Here’s a question I am surprised no one has asked yet…

What percentage of Google’s revenues came from ads? Do they not have other revenue streams (like Google Apps Premium)? That might change your numbers, even if very slightly.

 

Well if it wasnt for Google, that number wouldn’t be that large to begin with

 

Google’s revenues are generally thought to be 98 or 99 percent pure advertising revenues. I’ve heard numbers like that thrown out by Google execs in the past, and that is what Wall Street analysts are modeling.

 

Thanks, Stu. Added your math to the post.

 

@ Bref, post #8:

Care to elaborate?

By the way, people constantly refer to asses as dumb anyway. So, your statement that i am a “dumb ass” is redundant - thus revealing that you are dumber than an ass

My statements have logic.

“It’s 3:25 pm, do you know where your logic is?”

 
Bought GOOG Oct $630 calls - October 5th, 2007 at 12:44 pm PDT

It’ll be interesting to see if GOOG starts including DCLK revenues/profits in this quarterly report that comes out on the 18th. We also need to remember that as soon as they monetize YouTube in a lasting way, that will bring in a whole other set of new clients who might not have bought traditional text link ads.

Can’t wait to see the new numbers.

 

Gr888888888888

I have a song for google

go go google
gaga google
saga google
baja google

rock rock google
top top google
bull bull google
long long google

600 600 google
not enuf
700 700 google
wahhhh…not enuf
800 800 google
lets make it 1000 will ya
sure ya
1000 1000 google

go go google
gaga google
…..

 

@ boston

your explanation why you think the term ‘dumb ass’ is redundant proves that you are indeed a DUMB ASS

@ fake steve ballmer — GO AWAY — you are also a Dumb Ass. Please just go away

 

Good for Google. Maybe if Yahoo and Microsoft did a better job with their search and advertising then Google wouldn’t have such a big lead. I don’t know if they benefit more from better technology and a brand or from poor competitors who can’t innovate to save their hides.

Good god, that Fake Steve Ballmer is just such crap! I would rather listen to the real Ballmer than that any day.

@boston: ‘List sources for your data: Unless you do so, I really cannot validate your statements and have no trust in them.’ Oh no, surely TechCrunch will fail miserably if you don’t believe in an article.

 

I think Henry Blodgett is right - GOOG at $2K for sure. People scoffed at $100 oil…

 

IP ban the Fake Steve Ballmer. That is just pure spamming.

In other news, great post.

 

Regarding the Google revenue mix, it’s consistently been ~99% advertising for the past few years. I don’t think there’s any indication that that will change anytime soon. See last year’s 10-K here:

http://www.sec.gov/Archives/ed.....4/d10k.htm

Note this text: “Advertising revenues made up 99% of our revenues in 2004, 2005 and 2006. We derive the balance of our revenues from the license of our web search technology, the license of our search solutions to enterprises and the sale and license of other products and services.”

I’d like to know how much of that advertising revenue is derived from the parked domains program, AdSense for Domains (google.com/domainpark/). Anybody know?

 

If you back out Classifieds, where Google doesn’t play, its share is actually much higher.

Keith Teare
ceo/founder/edgeio.

 

they are following the software monopoly king footsteps
http://vidsonly.blogspot.com

 

Friends,
Please dont fight.

We all need peace
and money
and (lots) google
and oil
and women
and peace
and…..

 

Only 40%? So the non-Google ads actually manage to pull in money? I could’ve sworn Google’s share is at 90% or thereabouts.

 

Google could pay better for publishers.

 

Isn’t there some double-counting going on here?

Google paid $1 billion to its AdSense partners, who then report all that revenue to the IAB. Google claims that revenue too in its financial statements (reporting the partner share as a cost of revenue). But the IAB report should exclude it.

Googe’s share of total ad dollars is then 30%, not 40%. Still really impressive, but that’s a big difference.

Jason

 

I’m not at all surprised. As a publisher (I own http://www.stylediary.net), ad networks dominate a lot of the scene and they’re kind of a pain in the ass. Why would an advertiser take a gamble on a site when he/she can shove $$ into an adnetwork and feel relatively safe? The metrics, proof, etc. are all pretty slippery on the web right now - ad networks are a good and safe place to play.

There was a great, great article on Publishing 2.0 this past week about how advertisers are NOT putting money online due to the poor metrics - it’s a good read for anybody interested. I think this is driving A LOT of ad network business at the moment.

 

Does anyone know comparable figures for Europe?

 

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