How would you estimate Google AdSense revenue?
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in Estimation by (16 points) | 210 views

1 Answer

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Assumptions

  • Google earns revenue on a sharing basis with publishers
  • Google Search Ads not counted
  • Ads displayed on other webpages generates revenue
  • Google takes 30% commission on each ad clicked

Main Equation

Google Adsense Revenue = #Internet Population x #Ads viewed per year x CTR x CPC x Google's Commission

#Internet Population

Almost 50% of the world's population is connected to the internet. Hence,

Internet Population = 3.5 Billion

----

#Ads viewed per year

Ads counted in AdSense = Ads we watch while viewing any webpage (except Google Search Results)

Power Users = 40% views 20 ads a day

Casual Users = 40% views 10 ads a day

Occasional Users = 20% views 2 ads a day

Avg. ads per day = 0.4x20 + 0.4x10+ 0.2x2 = ~10 ads

Avg ads per year = 350 x 10 = 3500 ads

-----

CTR = 10%

CPC = $0.1

Google's Commission = 30%

Google Adsense Revenue = #Internet Population x #Ads viewed per year x CTR x CPC x Google's Commission

Google Adsense Revenue = 3.5 Bn x 3500 x 0.1 x $0.1 x 0.30

Google Adsense Revenue = $37 Bn per year

 

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