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$1,605: average annual ad value of a U.S. Google user

proton.me

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Re: $1,605: average annual ad value of a U.S. Google user

#31

Post by dotcoma »

dzonga wrote: post #30
dotcoma wrote: post #26

Earlier quoted context omitted.

So, the average user from Canada, the UK, Germany, Japan etc is worth 1% of the average US user or less? Do you wear a red baseball cap?

let's not personalize issues. google made about 400bn last year. 200bn of that was from the US alone. now you can estimate how much the UK brought in. & for PPC rates - you can see conversion rates as well. I run an alternative to Google analytics for a niche market so yeah.

1st: no need to personalise, I agree. Sorry about that.

2nd: where did you get the 200 bn USD figure for the US ?

3rd: if we multiply 250 M people (likely Google users in the US out of a population of 349 M) and multiply it by the 1,605 USD that Google is said to make out of an average user in the linked blog post by Proton, we get 401 bn USD, not 200 bn.

Re: $1,605: average annual ad value of a U.S. Google user

#32

Post by jsnell »

dathinab wrote: post #25
dotcoma wrote: post #2

There's a problem... Population of the US: 349 M, of which 250-300 M use Google services, multiplied by 1605 USD per user = from 401 B USD to 481 B USD, but in 2025 Alphabet did 403 B in total, from every service, in the whole world.

This could be explained by the 250-300 M you refer to not matching the same distribution due to 1. this seems to be google ad network specific, not google services per-see 2. the analysis seem to only include users which do in general generate ad revenue, e.g. all AD Block everywhere users are not included in the distribution 3. given the lower bound I assume ad views which have no clear attributable user, and/or use…

The Google ad network's revenue is 10% of their first party ad revenue. It would be even harder to make the numbers work that way.

Re: $1,605: average annual ad value of a U.S. Google user

#33

Post by zamadatix »

dotcoma wrote: post #2

There's a problem... Population of the US: 349 M, of which 250-300 M use Google services, multiplied by 1605 USD per user = from 401 B USD to 481 B USD, but in 2025 Alphabet did 403 B in total, from every service, in the whole world.

The population of the US is not necessarily the same as the population of Google's users with personalized ad profiles in the US, even though it sometimes feels that way :). E.g. you go from 349,000,000 to 267,000,000 just by removing the under 18s.

Re: $1,605: average annual ad value of a U.S. Google user

#34

Post by dotcoma »

zamadatix wrote: post #33
dotcoma wrote: post #2

There's a problem... Population of the US: 349 M, of which 250-300 M use Google services, multiplied by 1605 USD per user = from 401 B USD to 481 B USD, but in 2025 Alphabet did 403 B in total, from every service, in the whole world.

The population of the US is not necessarily the same as the population of Google's users with personalized ad profiles in the US, even though it sometimes feels that way :). E.g. you go from 349,000,000 to 267,000,000 just by removing the under 18s.

With 250 M users in the US, we’d reach 401 bn, vs 403 bn which were their worldwide revenues in 2025.

Re: $1,605: average annual ad value of a U.S. Google user

#35

Post by JohnQPulp »

It's interesting/non-intuitive to me that parents would be worth less than non-parents. I wonder: is that because they actually tend to spend less, or is it because more of the clicks are accidental ones, from when the kids get handed the phone?

But I guess that would apply more to display ads than to search ones, so I'm not sure. Confusing.

Re: $1,605: average annual ad value of a U.S. Google user

#36

Post by mattnewton »

JohnQPulp wrote: post #35

It's interesting/non-intuitive to me that parents would be worth less than non-parents. I wonder: is that because they actually tend to spend less, or is it because more of the clicks are accidental ones, from when the kids get handed the phone? But I guess that would apply more to display ads than to search ones, so I'm not sure. Confusing.

My best guess is that for certain goods, people make purchasing decisions around major life events like getting married or becoming parents. If they have already crossed those thresholds those purchase patterns may be harder to unseat and replace, they may already be solving those new needs and have habits around existing brands.

My second guess is that DINKs have more disposable income.

Re: $1,605: average annual ad value of a U.S. Google user

#39

Post by lvales »

dotcoma wrote: post #2

There's a problem... Population of the US: 349 M, of which 250-300 M use Google services, multiplied by 1605 USD per user = from 401 B USD to 481 B USD, but in 2025 Alphabet did 403 B in total, from every service, in the whole world.

FTA: "One caveat: this analysis estimates advertiser demand for access to a given profile. It does not reflect the exact revenue Google receives from any individual user. What the model reveals is the ceiling, the maximum price the market places on your attention."

From this I believe that your problem can be solved. In accounting terms, the 1605USD isn't a flow (e.g., revenue) but rather a stock (e.g., receivable). They've estimated value about how much a profile is worth, which you shouldn't use to draw those conclusions about revenue.

Re: $1,605: average annual ad value of a U.S. Google user

#40

Post by mrguyorama »

dathinab wrote: post #18

This is a good example of why averages (by themself) can be very misleading: - avg. $1_605 - but mean is $760, i.e. half the users generate $760 or less I also wouldn't be surprised if the sampling distribution has two maxima even if smoothed (on around the mean and another at the lower end). Would be nice to have that plotted out properly.

It's also why Google doesn't want to just charge for services. I wouldn't pay more than about $60 a year or so, because I am very much on the low end for value I bring to Google, but they would never accept that because it would be a huge haircut on the high value users, and if they set it high enough to be profitable for high value users, I literally can't afford it.

The ad ecosystem allows them the equivalent of ideal price discrimination. You bring in exactly how much revenue they can squeeze out of the economy for access to your eyeballs.

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