News/
Analysis

Google Takes the Credit - While Marketing Executives Burn Through Billions

Billions are being poured into Google Ads, but a our new study shows that the majority of marketing budgets are spent on keywords that erode profit margins. The industry itself is also exacerbating the problem.

What the data really says

Dashboards often make search look like the growth engine. But when we analyze real business data, a different picture emerges: brand drives demand; search ads mostly harvest it.

In our joint study with Norwegian industry bodies, we examined 13 companies investing a total of NOK 123 million in Google Ads. The pattern is consistent across categories.

Brand vs. non‑brand: follow the margins

Brand terms are few but extremely effective—lower cost per conversion and higher intent. Generic terms still matter (that’s where “best running shoe”‑type searches live), but many don’t carry their own cost relative to product margins.

– Budget mix: On average, ~80% of search spend goes to non‑brand (generic) keywords.

– Cost to convert: A conversion from generic terms is ~6× more expensive than from brand terms (and in some cases up to 30×).

– Power law: As little as 5% of keywords can generate ~90% of revenue.

A large portion of the traffic attributed to Google is actually customers who already know what they want to buy.

— Robert Ryberg

Why dashboards mislead

Most reporting over‑credits the last click. If a ready‑to‑buy customer types your brand and clicks the top paid result, it looks like Google created the demand – when paid search simply caught the demand that your brand building activities have created.

Add to that siloed teams, KPI inflation, and agency incentives that favor more campaigns, more keywords, more complexity – and budgets drift away from what actually grows profit.

Dare to cut off the long tail

— Peter Lundberg

  • 1.
    Cut the tail: Separate brand vs. non‑brand and review performance keyword by keyword against your unit economics (product margin, not just CPA/ROAS). Turn off what doesn’t pay back.
  • 2.
    Make branded search a company KPI: Track and report branded search volume at the executive level. It’s the clearest signal that your brand is compounding—and the most scalable lever for profitable growth.
  • 3.
    Take a holistic‑business view: Organize and budget for outcome over channel. Stop building the marketing department from the bottom up, isolated across different channels and platforms. Companies must start with the big picture of what’s required, rather than letting silo thinking dictate the budget.

What about AI search?

Despite the hype, AI‑driven traffic in our dataset is currently negligible (<0.1%) amongst the companies in this study. This varies accross different industry categories, and may change in time, but the principle holds: brand decides the choice, whether the journey runs through Google or an AI interface.

The article was initially published in the Swedish marketing trade magazine Resumé.