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Did Google make £3.768bn from users who had no idea they were being advertised to?

Here's a study of 2,000 people where we try to find the answer to that question & more.

You may remember two studies which found that 40% of people did not understand that Google ads were ads in 2013, and that 36% still don't understand this in 2014.

These were researcher-led user tests, of around 100 people each, led by Bunnyfoot.

During the tests, at the end of a scenario based around a Google search, users were asked the question "Recall any ads?".

Google made $10.469bn in revenue from ads on its own sites alone in the first three months of 2014.

This means that - assuming all is equal and that 36% of that cash was the result of people clicking without recognising ads - the vague implication here is that Google generated $3.768bn from users who had no idea they were being advertised to in the first place. Quite a scary thought.

Based on this, Graham Charlton and I decided to run a pair of tests, across a total of just over 2,000 people, to answer these questions:

  1. Are people aware of the existence of ads on Google Search?
  2. Do they believe they click Google ads? And, if so, how frequently?

We ran one test using Google Consumer Surveys, one using Toluna. Both of these are survey panels, gathering answers for us from UK internet users.

Headline stats

We ran two parallel studies, with completely separate audiences, to validate our results.

Both survey pools were UK internet users, the first pool was 1,004 users; the second pool was 1,000 users.

Study A results:

  • 14.14% of people say they've never seen an Ad on Google.
  • 22.41% of people say they've seen Google Ads but never clicked.
  • 37.85% answered that they click Google ads "Not very often at all".
  • 17.93% say they click "When I see something interesting".
  • Just 7.67% say they "often click ads on Google Search".

Study B results:

  • 5.9% say they've never seen an Ad on Google.
  • 29.2% say they've seen ads on Google, but never clicked.
  • 32.4% say they click Google ads "Not very often at all".
  • 23.6% say they click when they see something interesting.
  • Just 8.9% say they "often click ads on Google Search".

Combined results

Both sets of results follow an identical pattern in terms of the popularity of each answer. The most popular answer in each case was that users click Google Ads "Not very often at all".

The least popular answer in each case was "I often click ads on Google Search". Combining the results of our two surveys, here are the overall answers to the question "How often do you click ads on Google Search?" from just over 2,000 UK internet users:

Combined Survey Results

Breakdown by age

Breaking out 'Study A' by age, we see the following:

 

18-24

25-34

35-44

45-54

55-64

65+

Anonymous

I've never seen an Ad on Google

12.80%

5.73%

11.11%

17.58%

11.43%

10.78%

22.14%

I've seen them, but never clicked

24.00%

15.92%

20.83%

21.98%

29.52%

27.45%

21.79%

Not very often at all

36.80%

38.85%

41.67%

27.47%

37.14%

36.27%

40.00%

When I see something interesting

23.20%

31.85%

15.97%

16.48%

17.14%

16.67%

10.00%

I often click ads on Google Search

3.20%

7.64%

10.42%

16.48%

4.76%

8.82%

6.07%

  • The most popular answer to the question "How often do you click ads on Google Search?" among every age group was "Not very often at all".
  • The least likely group to choose “I often click ads on Google Search” were the 18-24 year olds.
  • 18-24 year olds were also the second highest group to answer "I've never seen an Ad on Google". Albeit only a single data point, that nicely contradicts the "digital natives" meme that implies somehow younger age groups are magically more likely to understand anything & everything technology.
  • 25-34 year olds were most 'engaged' in general with Google ads, while 35-54 year olds were most likely to answer "I often click ads on Google Search" (even then, well under 1/6th gave that answer).

Breakdown by age

 

Women

Men

Anonymous

I've never seen an Ad on Google

13.87%

9.48%

21.79%

I've seen them, but never clicked

22.83%

22.19%

22.18%

Not very often at all

37.86%

36.66%

39.69%

When I see something interesting

17.34%

23.19%

10.51%

I often click ads on Google Search

8.09%

8.48%

5.84%

Summary

Again breaking the popular myth that men & women behave very differently online, we see here that the pattern among men and women is very similar.

In fact, the difference between the 'Male' answers is far closer to 'Female' than the difference between either gender & the 'Anonymous' group.

The differences that do exist between genders are fairly tiny: 68.33% of men acknowledge that they click (ie. answer 'Not often', 'When I see something', or 'Often') vs 63.29% of women. 

Women are less likely to acknowledge they’ve ever seen an ad, at 13.87% vs 9.48% of men. (if you’d like to make that figure sound bigger, you can also phrase it as “women are 31.69% less likely to say ‘I’ve never seen an Ad on Google’ than men”, but really that vastly overplays the difference)

Flaws, caveats, etc.

It’s always worth pointing out the flaws and caveats in studies like this.

Here are a few:

  • The question asked “How often do you click ads on Google Search?”. Four of the answers implied that Google does have ads. It’s always possible some respondents therefore avoided answering “I have never seen a Google ad”, as that feels like the wrong answer.
  • The answers were posed in the same order each time. We’d actually wanted to randomise them, but Google Consumer Surveys insisted we ran them in scale order. (I was pleasantly surprised Google allowed the survey to go live; occasionally they can be quite strict about what they do/do not allow)
  • Here, as with all surveys of this type, we are asking users what they believe their behaviour is, rather than observing their actual behaviour. In this case, I think that’s fine, as really we’re trying to answer the question “do you consciously understand that Google Search uses ads?”
  • The sample sizes overall were ok: two surveys of 1,000 people carried out separately. Once you drill down to individual segments (eg. “18-24 year olds”), the sample size of course drops to the hundreds/tens, and is therefore less conclusive.

Overall summary

Google recently switched its ads to a format where, aside from a yellow 'Ads' icon, and slightly darker text, the format of paid search ads is identical to the format of organic results.

Perhaps this was in result to some of the somewhat negative sentiment we've picked up on here, or perhaps it was simply the result of straight testing without hypotheses.

Overall, the picture here is brighter than previous studies. 90% of users say they have seen ads on Google. That still leaves a disturbing 1 in 10 who apparently do not understand that those links with the word 'Ads' beside them are actually ads.

Further toward the negative side of things, just 8.28% overall say they click Google ads 'often', more than a quarter of users who acknowledge seeing Google Ads say they never click them, and a further 35% say they don't click them very often at all.

Does this mean you should use your ad budget any differently? Is there further analysis we should run on this? What do you think?

dan barker

Published 24 June, 2014 by dan barker

Dan Barker is an E-Business Consultant and a contributor to Econsultancy. He can also be found on Twitter and Google Plus

9 more posts from this author

Comments (16)

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Susan

I'd be curious to know how many of that 10% are even aware of the paid ads vs. the organic ones. It's amazing to me when I'm around someone who doesn't realize there's a distinction.

I wouldn't place a high value on the "often" clickers...PPC comes down to quality vs. quantity. It would be interesting to know why they "often" click - better results than their organic choices?

almost 2 years ago

Daniel Gilbert

Daniel Gilbert, Managing Director at Brainlabs

Brilliant article! I've always wondered about this and collected anecdotal evidence but to see it studied like this is great. Thanks for the excellent journalism!

almost 2 years ago

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Danny Cools

Nice study - revealing, the Age Distrubution on "I've never seen an Ad on Google" is not quite what I expected.

almost 2 years ago

Andy Headington

Andy Headington, CEO at Adido LimitedSmall Business

Very interesting article so great work. I've always been interested in the research v actual behaviour of users when it comes to ads. In all of the talks I do, I very rarely get people say they click on ads (<5%) yet most of the evidence contradicts this. I would assume that users still, after years of using Google, Bing, Yahoo etc don't know what they are actually clicking on hence where the confusion comes up. I'm not sure that this will ever really change, regardless of what colour, imagery or fonts they actually use.

almost 2 years ago

John Woods

John Woods, Digital Business Improver at Sharp Ahead Ltd

Great article. I am surprised this area doesn't get more attention.

I ran some research several years ago (around 2008) which monitored the actual behaviour of a panel of users. It was a small study (for an internal company project) and not very scientific, but I have reasonable confidence in the results. We found that around 80% of the clicks on Adwords came from around 15% of the users. So this very much supports the idea of two distinct types of Google user, "frequent ad clickers" and "seldom/never ad clickers".

I interpret this as two groups of people with different mental models of the SERPS - the "seldom/never ad clickers" know the paid listings are ads and are suspicious of them for that reason, while the "frequent ad clickers" either don't know or don't care about the difference between natural and paid listings.

If you think of this in terms of PPC budgets it's quite striking - 80% of your spend is going to 15% of your audience.

If this is the true picture - and we need to be careful I guess as this research isn't definitive - surely there's a case for search engines discounting PPC charges for the "frequent ad clickers"? Or providing an option to target ads towards the "seldom/never ad clickers" group?

almost 2 years ago

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Martin Duys, Director Delivery Managemet at Acceleration eMarketing

So does that mean that PPS add on Google are essentially a form of 'native' advertising?

almost 2 years ago

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Suzie Harris

I feel that the results of this study are somewhat misleading. For those who have AdBlocker installed, the answer to the question 'Have you ever seen an Ad on Google?' would quite rightly be no.
It is not a case of them not recognising ads, merely that they don't have them appear on their SERP. The pages look dramatically different depending on whether AdBlocker is running.

almost 2 years ago

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Neil Edwards

If I was Google or a paid search consultant, I'd be delighted with these results.

Apart from showing there is a community of conscientious objectors (admittedly quite large at 1 in 4), it shows that 3 in 4 people will click on a paid advert if they think it is relevant to their needs.

Given the alternative is slow and unpredictable SEO, paid search is an efficient way of getting to a broad and relevant audience. The challenge for advertisers is as it ever was: to construct adverts that are pertinent and appealing.

almost 2 years ago

dan barker

dan barker, E-Business Consultant at Dan Barker

Hi, Suzie, thanks for the comment & the note on Twitter.

You say- "For those who have AdBlocker installed, the answer to the question 'Have you ever seen an Ad on Google?' would quite rightly be no."

I'd actually have thought the opposite. I'd assume most people who install ad blockers had thought at some point "these ads are annoying. I'm going to install an ad blocker to get rid of them", and therefore would have likely seen ads.

Either way, I don't think the 'results' are misleading, the results simply break down the percentages of people who answer a question in a particular way ("How often do you click ads on Google Search?").

You may say "I think one of the reasons behind some of the answers is that people use ad blockers", just as someone else may say they believe that people click ads without realising they're ads, etc. All are very good points.

dan

almost 2 years ago

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Suzie Harris

Hi Dan,

Thanks for the response.
I think that are any number of reasons that someone may install AdBlock software, Google Ads are by no means the most intrusive, personally I did it for the purposes of 4oD.

I suppose also that it depends on how the answers to the question are presented. While I have seen Google Ads in the past, not for maybe the last 2 years, and so clearly in that time I have never clicked on them. That being the case, I could easily have forgotten that there were Google Ads there in the first place. If presented as a multiple choice, I would not know how to answer the question honestly.

It's an interesting study, however. Though I do believe there could still be cases where people genuinely haven't ever seen a Google Ad, maybe if someone else installed the software for them?

Suzie

almost 2 years ago

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Alan Gregory

Great analysis and write up!

I worked for a large online retailer and did some similar research into the company's staff. Whilst trying to find ways to keep PPC spend down, I came up with a possible reason for lower conversions. I emailed the call centre staff and asked them which link they wold click if they typed the company into Google. Before all the staff realised what my email was about and started to confer with each other over the correct answer, I discovered that around half of the call centre were clicking ads over the natural search engine result.

Sometimes your own employees can be the ones who are costing you money.

Great article

Alan
MonkeyFace SEO

almost 2 years ago

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Alexander Croucher

Alan

For future campaigns you might consider using the native IP address blocker built into AdWords' campaign settings. It'll stop your ads showing to staff and competitors etc.

Great article by the way. As paid search consultants this is great news for us.

almost 2 years ago

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marcus

Hi Dan,

Nice read, here are my 2 cents. As a test to earn some money online, I started 2 months ago a website from scratch. On this site I put some ads with Google AdSense. On average 40 visitors just 1 clicks on an Ad.

Cheers from Amsterdam,
Marcus

almost 2 years ago

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Wouter Blom

Cool, very cool.

Next time one of the questions could be differentiating between the ads that are above the normal results and those that are to the right.

I sometimes have to explain that to my potential customers in order to explain the added value of Google Ads.

And the google shopping results, are customers aware they are ads as wel?

almost 2 years ago

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Janco

Interesting results!

I am curious how this research would compare to what these respondents would actually do if they were given a task to buy a certain product they really need. From user research we know what users actually do and say can differ quite a lot. (http://www.nngroup.com/articles/first-rule-of-usability-dont-listen-to-users/)

Nonetheless very interesting to see the answers and break down in ages. Give us more insight!

Regards, Janco

almost 2 years ago

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Webton

Nice!
Next time one of the questions could be differentiating between the ads that are above the normal results and those that are to the right.

almost 2 years ago

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