biddable world: google & money, dan fallon
DESCRIPTION
We depend on Google… But how much are we worth to Google?TRANSCRIPT
Google & Money
1st September 2014
Who Are We & What Are We Worth?
• Search Star was set up in 2005• PPC, Analytics & Conversion are core
services• 18 strong team based in Bath • We depend on Google…but how much are
we worth to Google?
IPO’d 19th August 2004 @ $85
Market Capitalisation on 22nd August 2014 = $399bn
Google Global Revenue ($m)
Share Of Revenues Q2 2014:
USA = 42%UK = 9%
RoW = 49%
Global Revenues By Source
Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14$0
$5,000
$10,000
$15,000
$20,000
439 666 829 1,049 1,046 1,230 1,647 1,554 1,596
7,542 7,7278,640 8,640 8,868
9,375
10,538 10,469 10,935
2,9833,133
3,436 3,262 3,1933,148
3,522 3,3973,424
10,96411,526
12,905 12,951 13,10713,753
15,707 15,42015,955
Other Google Sites Network
Q2’14 Y/Y Change = 22%Q2’14 Q/Q Change = 3%
($ in millions)
Play, Gdrive,
fibre etc.
Click Volumes Are Growing
Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'140%
10%
20%
30%
40%
50%
20%
23%
26%
31%
26%25%
20%
13%
5%
10%9% 9%
20%
29%
40%
44%
37%
33%
Aggregated Network Google Sites
Y/Y Paid Clicks Growth %
Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14-16%
-12%
-8%
-4%
0%
-4%
-6%
-8%
-11%
-9%
-6%
-9%
-5%
-6%
-11%
-12%
-13%
-2%
-8%
-13%
-15%
-11%
-7%
Aggregated Network Google Sites
Y/Y Cost-Per-Click Growth %
But CPCs Are Falling
“We’re seeing tremendous innovation in advertising, which will help us monetize mobile queries more effectively than desktop today. Indeed, our mobile monetization per query is already a significant fraction compared to desktop. In short, as we transition from one screen to multiple screens, Google has enormous opportunities to innovate and drive ever-higher monetization, just like search in 2000” Larry Page Oct 2012
Relevant Ads on Multiple Screens & Devices
Payments to network & distribution
partners
Data centres, content
acquisition costs, credit card
charges etc.
2010 2011 2012 2013Google Revenue $29,321 $37,905 $50,175 $59,825
Traffic Acquisition Cost $7,317 $8,811 $10,956 $12,258Other Cost of Revenue $3,100 $4,377 $9,678 $13,600Total Cost of Revenue $10,417 $13,188 $20,634 $25,858R&D $3,762 $5,162 $6,793 $7,952Sales & Marketing $2,799 $4,589 $6,143 $7,253General Admin $1,962 $3,224 $3,845 $4,796Costs & Expenses $8,523 $12,975 $16,781 $20,001Total Costs $18,940 $26,163 $37,415 $45,859
Income From Operations $10,381 $11,742 $12,760 $13,966Net Income After Tax $8,505 $9,737 $10,737 $12,920
Google Headcount 32,467 37,544 43,862
Google Revenue Per Head $1.17 $1.34 $1.36
$$$$$$$$$$$$$$$$$$$$$$$$s
($ in millions)
So What’s Search Star To Google?
• If Search Star manages £20m pa…• Google last 12 month revenue = $60.8bn– $60.8bn = £36.6bn– UK is 9% of global revenue = £3.3bn– Search Star manages 0.6% of UK revenues