Technology giant Google has explained how its search ads work. Google says it does not sell personal information of its customers for making money.
Google parent Alphabet recently reported that its revenue rose to $46.17 billion during the third quarter of 2020 from $40.5 billion a year earlier.
If you’re searching for information on Google where businesses might have relevant services or products to provide, you will likely come across ads. These could be ads from the flower shop down the street, your favorite retailer. If there are no useful ads to show for your search, you won’t see any.
How and when we show ads in Search
Nearly all of the ads you see are on searches with commercial intent, such as searches for “sneakers,” “t-shirt” or “plumber.” Google does not show ads — or make money — on the vast majority of searches. On average over the past four years, 80 percent of searches on Google haven’t had any ads at the top of search results. Further, only a small fraction of searches — less than 5 percent — currently have four top text ads.
Though Google follows principles for how and when ads can appear in Google Search, there are a variety of factors beyond its control that influence how many top ads people may see, like whether you’re searching for something commercial, whether advertisers are interested in advertising against that subject, or whether there are ads that are relevant to your query.
For example, in April 2020, people saw an average of 40 percent fewer top text ads per search than they did compared to April 2019. This was primarily due to COVID-related effects, when advertisers were reducing their ad budgets and users were searching less for commercial interests. Therefore, Google Search users saw fewer ads on average.
It’s about quality, not quantity
Organizations that want to advertise in Google Search participate in an auction and set their own bids (the amount they are willing to pay per click) and budgets. But advertisers’ bids are only one component of ad ranking algorithms.
When it comes to the ads you see, the relevance of those ads to your search and the overall quality of the advertisers’ ads and websites are key components of our algorithms as well. That means that no matter how large or small the organization is, they have an opportunity to reach potential customers with their message in Google Search. In the Google Ads auction, advertisers are often charged less, and sometimes much less, than their bid.
The experience of our users comes first, which is why we only show ads that are helpful to people. Even for the fraction of search queries where we do show ads, we don’t make a cent unless people find it relevant enough to click on the ad.
Google invests significantly in ads quality systems to continuously improve on the ability to show ads that are highly relevant to people, and helpful to what they’re searching for. Over time, this has led to better, more relevant ads and major improvements in the overall user experience. In fact, over the last four years, we’ve been able to reduce the rate of low quality and irrelevant ads by 3x.
Part of delivering a great user experience is also ensuring that Google Search ads are clearly labeled as coming from an advertiser―and we’ve long been an industry leader in providing prominent ad labeling. When Search ads do appear, they have the word “Ad” clearly labeled in bold black text in the current design. Google relies on extensive user testing both on mobile and desktop to ensure ad labels meet its high standards for being prominent and distinguishable from unpaid results.
A level playing field for all businesses, regardless of budget or size
With ads on Google Search we give businesses, organizations and governments around the world an opportunity to reach millions of people with information. Every advertiser, regardless of their budget, has the opportunity to reach people with ads in Google Search.
That’s why, for small and local businesses in particular, Google Search ads help them compete with the largest companies for the same customers and opportunities, not just in their communities but also around the world. Every day, countless small businesses use Google Search ads to help drive awareness for their products and services and reach new customers.
Just this year, in the midst of the COVID-19 pandemic, Google Search ads helped a bakery in New York reach more local customers and expand their business, provided a bicycle shop in South Dakota with the tools to go global, and gave a Black-owned chocolate shop in Dallas the opportunity to find new chocolate lovers from as far away as India.
Protecting your privacy
Google makes money from advertising, not from selling personal information. When you use products, you trust us with your data and it’s our responsibility to keep it private, safe and secure. That’s why we’ve built controls to help you choose the privacy settings that are right for you, and the ability to permanently delete your data.
“And we’ll never sell your personal information to anyone. As always, our goal is to ensure the ads that you see are as helpful and relevant as possible. This benefits millions of businesses and organizations, and most importantly, the people who rely on Google Search every day,” Google said.