Insurance is adding big bucks to Google’s profitability, according to new research released today.
After Google posted impressive profits for the second quarter 2011, almost $7 billion, Word Stream, a Boston, Mass.-based provider of search marketing software, embarked on a study to find out what keyword categories fetched the highest costs per click in Google AdWords pay per click advertising (PPC). And the keyword “insurance” took the top spot, by a large margin.
“Insurance was the winner by a landslide,” said Larry Kim, founder and chief technology officer of Word Stream.
He said 24 percent of the most of the most expensive keywords were related to the word insurance. That includes any word that people search containing the word insurance.
It’s these high cost-per-click keywords that make Google the majority of its profits, Kim says. Word Stream’s findings show that 97 percent of Google’s revenue comes from advertising on Google sites. In the last four quarters alone, Google made $32.2 billion in total advertising revenue.
According to Word Stream , the top five keyword categories that demand the highest costs per click, thereby netting Google the most money, are:
- Insurance (example keywords in this category include “auto insurance price quotes” and “buy car insurance online”)
- Loans (example keywords include “consolidate graduate student loans” and “cheapest homeowner loans”)
- Mortgage (example keywords include “refinanced second mortgages” and “remortgage with bad credit”)
- Attorney (example keywords include “personal injury attorney” and “dui defense attorney”)
- Credit (example keywords include “home equity line of credit” and “bad credit home buyer”)
Google AdWords is a marketplace where advertisers bid on keywords to compete for top ad placement. The minimum bid per keyword is 5 cents, but Word Stream research shows that in highly competitive categories, such as “insurance,” Google can make up to $50 per click. Kim’s research shows that the term “insurance” can fetch up to $54.91 as a top cost-per-click bid.
Kim says the keyword categories with the highest volumes and costs represent businesses with very high lifetime customer value – in other words, industries like the insurance industry can afford to pay a lot to acquire a new customer.
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