Why Do People Click on Search Ads?

Google loses more than a dollar per month due to me.

A search query costs Google about 1 cent. I average about four queries a day, and almost never click on an ad (I’ve clicked on one search ad once in the last 8 years). I’m a net loss to Google. My search engine usage is subsidized by the vast sea of people who actually click on an ad.

In fact, I’m surprised that every user doesn’t behave like me.

I find search ads an inefficient mechanism to connect with service/product providers. Many times, the ads are not even relevant to my query – when I search for “android adoption europe”, the ads are about adopting children. Even when the ads are relevant, I am not sure if the business is legit, how the business was rated by other consumers and how does their product compare with other businesses’ products. In other words, search ads lack context. There’s always a better alternative to a search ad.

So then, why do people click on search ads?

I got my first clue when my brother-in-law (a medical doctor in the U.K.) visited me. He wanted to check his email, but instead of typing the URL, he Googled “doctors uk“, and then clicked on the first link. And he’s a well-educated, well-off person. My brother-in-law is not an exception – The top query on Google in 2006 was… “Yahoo”! Users use search engines as a mechanism to recall URLs.

Users find it too cumbersome to navigate to multiple web-sites (like Amazon or Yelp). It’s hard to remember and type in URLs (even harder on mobile devices). Indeed, I find myself clicking on ads far more often on mobile devices.  Others may find Amazon or Yelp’s search interface too complex. Many people are not even aware of specialized portals (did you know that you can find handicrafts at Etsy.com?). A combination of convenience and ignorance makes clicking on an ad an attractive proposition for many users.

But it’s getting easier to find the most relevant product or service online. Mobile devices have apps so you don’t have to type URLs. Vertical search engine like Ebay, Yelp and Amazon are becoming more popular. And what’s better, as they become popular, they rank higher in the top 10 results on search engines – so users don’t have to remember URLs of other sites and don’t have to click on ads either. All these trends put a downward pressure on search RoI.

I believe that these specialized, vertical portals will eventually replace the search ads model. But that is a topic for another post.