A few days ago, Frédéric Peters (Cupidon at Cupidon.be) posted an interesting question to the LinkedIn’s Internet Dating Executive Alliance group: Given the oft-cited success of the online dating industry, what percentage of Google’s ad revenue is driven by the online dating industry?
Based on Frédéric’s question, I felt compelled to run a quick back-of-the-envelope estimate of the share of Google’s ad revenue contributed by the U.S. online dating industry based on publicly available numbers. I’m sure something similar could be cooked up for international markets as well.
Google 2008 revenues: $21.8 billion
% Google revenue from ads: 97%
Google 2008 Ad Revenue: $21.1 billion
Est. Total online dating industry revenues: $1.1 billion
Est. Total industry online ad spend: $127 million (2006 numbers)
Est. Total industry online ad spend (2008 adjusted, liberal swag): $200 million
Percent online ad spend to Google (swag): 80%
Est. Industry ad spend at Google: $200MM * 80% = $160MM
Est. Online Dating Industry Contribution to Google Ad Revenue: $160MM / $21.1BB ~ 0.8%.
All told, the online dating industry likely contributes somewhat less than 1% of Google’s ad revenue. Of course, there’s no question that cost-per-click on common keywords has risen dramatically for the online industry. This exercise also brought to mind a larger question for me as well that I hadn’t considered: is Google subject to the 80/20 rule? My guess: nowhere near it.