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Google leads online ad revenue with 38%

Advertising is necessary for the success of any business. If you can't get the word out about your products or services, how will you bring in customers and make money? While print, radio and TV marketing campaigns can add some revenue, the Internet will be the driving force behind advertising. According to the Pew Research Center, nearly $51 billion was spent on digital ads in 2014, an 18 percent increase from 2013.

"Nearly $51 billion was spent on digital ads in 2014."

There are many avenues companies can take when it comes to digital marketing, including various search engines and social media pages. However, if you want to have the best chance of reaching your audience right now, Google may be the way to go.

The success of Google ads
Google has long been the go-to source for consumers and businesses alike to research trends, products and rankings. By simply entering a term or phrase, the search engine can provide millions of relevant results in seconds. A June 2015 comScore report showed Google had more than 11,000 searches in June, nearly three times the amount of the runner-up, Microsoft, and Zenith claimed that the engine's ads made up half of all online revenue in 2014.

Google is also one of the five companies - Facebook, Microsoft, Yahoo and AOL are the others – that make up more than 61 percent of the annual digital ad revenue, with Google in the lead with 38 percent, according to the Pew Research Center. This may be because of the wide array of businesses the brand owns. It's restructuring under Alphabet Inc. could not be more accurate, as its companies, such as Android, Blogger, Drive, Translate, Wallet and YouTube, fall under every letter of the alphabet.

The search engine has also attempted to make mobile a priority for both its businesses and companies who advertise with it. In early 2015, Google altered its algorithm for searches on cellphones and tablets to give priority to mobile-friendly websites, the Wall Street Journal reported. The organization offered tips for how to create better Web pages to companies prior to the switch. This was a critical move for Google, as mobile ad spending accounts for 37 percent of all digital campaigns. If businesses wish to remain relevant in today's mobile age, they must cater to consumers' desires. This is just one step in that direction.

Obstacles may hinder Google's revenue
Despite Google's success, the company also faces its struggles. Its revenue isn't as high as it could be considering the various pages Google owns and operates. If Google wants to be able to compete with other digital advertisers, it must take a look at its current obstacles.

  1. Mobility
    Google has made mobility a priority, as consumers today are always on the go and expect to have the same abilities on their phones and tablets as they do on their desktop computers. However, mobility is also an issue when it comes to digital ad revenue. People may look for merchandise and conduct product research on their mobile devices, but those searches aren't leading to high conversion rates, Ad Age explained. People may not buy their products online and their orders are smaller when compared to a desktop. While Google's mobile-friendly algorithm might lead to greater sales, it cannot offer success overnight.
  2. YouTube
    Everyone loves watching videos. It's easy to open up YouTube on a browser or mobile application and search for the latest Ted Talk, how-to segment or funny cat video. However, advertisements on videos aren't as successful as the content they're displayed on, according to the source. These ads don't cost as much as other campaigns, which means Google ad revenue is down, despite the high number of clicks. According to Google CFO Ruth Porat, people are spending 60 percent more time watching videos compared to last year, and each session lasts an average of 40 minutes. Google will need to figure out how to convince companies to pay more for their YouTube ads to capitalize on the website's success.
  3. Social media
    While Google may still be in the lead in terms of digital ad revenue, the company is facing competition from other companies' efforts. By 2017, Facebook and Twitter will account for nearly 34 percent of U.S. digital display ads, a 30 percent increase from this year, eMarketer reported. The source predicted that Twitter will surpass Yahoo by the end of the year and Facebook will make up more than one-fourth of the total digital ad market. Both social media businesses have seen success because of mobile, which will pass desktop use in 2015. While Google's new algorithm may help boost sales, it may not be able to hold the company's lead over other online marketers.

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