Methodology

The economic impact of Google Search and Ads is estimated by three key data-driven assumptions, detailed below:

First, we assume that for every $1 businesses spend on Google Ads, they generate an average of $2 in profit. This estimate was developed by our first chief economist, Hal Varian, based on observed cost-per-click activity across a large sample of advertisers. His methodology was published in the May 2009 American Economic Review article "Online Ad Auctions" and later validated by the Google Economics team using internal data.

Second, we assume that businesses receive an average of five clicks on their organic search results for every one click on their ads. This estimate was developed by academic researchers Bernard Jansen and Amanda Spink using sample search log data. Their findings were published in the 2009 International Journal of Internet Marketing and Advertising article "Investigating customer click through behaviour with integrated sponsored and nonsponsored results," and subsequently validated by the Google Economics team with internal data.

If organic search clicks were as commercially valuable as ad clicks, these two assumptions would imply that businesses receive $11 in profit for every $1 spent on Google Ads. The calculation is as follows: advertisers receive double their ad spend in profit from ads (2x spend) and five times that amount from organic search (5 x 2x spend). After subtracting the initial investment (1x spend), the total profit would be 11 times the initial spend: 2(spend) + 5 * 2(spend) - 1(spend) = 11(spend).

However, clicks from organic search results may not be as commercially valuable as ad clicks. Therefore, we apply a conservative adjustment and consider that organic search clicks are approximately 70% as valuable as ad clicks. This choice was validated through internal data analysis by the Google Economics team. This revised calculation shows that advertisers receive, on average, eight times their ad spend in profit: 2(spend) + 0.7 * 5 * 2(spend) - 1(spend) = 8(spend).

Therefore, we estimate that for every $1 a business spends on Google Ads, it receives $8 in profit from Google Search and Ads. To calculate the total economic value for advertisers, we multiply the total amount they spent on Google Search and Ads by this factor of 8.

We estimate the economic impact of Google Cloud based on the benefits that it generates for its users. We rely on American companies’ investments in Google Cloud for this calculation and make two core assumptions. First, we assume that Cloud technology is driving revenue growth and cost savings across both small and large organizations. Second, we assume that every dollar invested in Cloud services by our users generates a net return. The methodology we use does not include any Cloud services that are provided for free.

Like the economic impact of Google Search and Ads, we rely on two multipliers to estimate the economic impact of YouTube Ads, based on analysis of actual campaigns run on YouTube. First, we assume that advertisers are willing to pay twice the amount of what they actually spend. Second, we assume that brand advertisers receive, on average, more organic views on their channels than paid views. Then, using similar methods used to determine the economic value of Google Search and Ads, we were able to estimate a total surplus, or profit, for advertisers based on what they spent.

The economic impact of Google Network Properties, YouTube, and Google Play is based on the estimated amount we paid to publishers, creators, and developers in each U.S. state in 2025 for placing our ads next to their content and from app monetization.

Similarly, the impact of Google Ad Grants is the total amount spent by grant recipients in 2025.

Total economic value for each state is estimated as the economic activity provided to businesses, publishers, nonprofits, creators, and developers by Google Search, Google Play, YouTube, Google Cloud, and Google advertising tools in 2025.

This is an attempt to estimate the economic impact of Google’s core search and advertising business. In search and advertising, we derive a conservative estimate of the impact of our tools on businesses, publishers, nonprofits, developers, and creators. We leave out other estimates, such as the cost savings for consumers who are now able to find the information they need more easily than before. We also do not include our employees’ economic impact or that of other major products, such as Google Maps and Google Analytics. So while we are confident in our estimates, consider them a lower end of Google’s true economic impact.