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Wednesday, May 26, 2010

Google Generates $33M Yearly in South Dakota

Google provides what they call a conservative estimate of the economic activity they generate in each state of the Union. Google says $54 billion a year moves around thanks to its search and advertising tools. Now that's not including the economic activity that occurs when I Google "rain barrel downspout diverter," find one that fits the tank I liberated last fall, and order it from Home Depot. That $54 billion is just the money that changes hands when we click on the sponsored links on searches or the Google ads on various webpages.

South Dakota hears the jingle of "just" $33 million—0.06%—of that Google economic activity. We have 0.26% of the national population, so we seem to be lagging in bidding for search terms and buying Google ads to make a buck. Compare the two states that claim the biggest chunk of the Google pie, California and New York. California has 12% of the nation's population but rakes in 26% of the Google bucks. New York has 6.4% of the nation's population but claims 11.7% of that economic activity.

There are twelve states total whose percentage of Google's economic activity exceeds their percentage of the U.S. population. In other words, 11 states and D.C. ring up more Google cash per capita than the national average:

Google econ. activity per capita
Dist. Columbia $423.58
Washington $420.16
California $381.48
Massachusetts $333.66
New York $322.39
Illinois $247.86
Utah $231.63
Connecticut $211.18
Nebraska $192.58
Nevada $192.58
Arizona $181.93
Delaware $180.77

South Dakota's annual per capita Google cash is just $40.62, which ranks us 41st nationally. Being a rural state doesn't mean you can't make money with Google ads—consider that Utah and Nebraska have landed spots in the top ten for per capita activity. It may be that South Dakota businesses are more dependent on local markets and don't see as much advantage in casting the wide 'Net for online business as they do in advertising in traditional local media to reach their mostly nearby customers.

Google says some 2200 South Dakota advertisers and website publishers engage Google's advertising services. Google spotlights Aberdeen's KitchenTuneup.com as an example. With franchises across the country and in Canada, Kitchen Tune-up is in a good position to take advantage of such broad Web exposure.

Still, the South Dakota businesses that are taking advantage of Google advertising are generating less economic activity per business than the national average. Each participating South Dakota business generated $16,500 in Google cash (the Madville Times is dragging that average way down). That amount ranks us 36th nationally on that score, so our Google-inclined businesses are making more of Google than counterparts in some other states. But compare our take to the national average of $35,431 in Google cash per participating business. The highest per-business performance is in Nebraska, whose 5000 Googly businesses generate $69,200 each in direct Google economic activity.

$69,200 per business: for you big operators, I suppose that's peanuts, but wowza! if I could generate even half that with ads here on the blog, I'd quit my day job. Must blog harder!

Check the complete state-by-state data and my calculations yourself on my homemade spreadsheet (you're welcome!).

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