How Much Is Google Worth to N.Y.?

Company Says $6 Billion

By Aaron Rutkoff

How much is Google worth to the New York economy?

According to a Google analysis released Tuesday, the state saw $6.3 billion in economic activity driven by paid search-term advertising and free queries on the search engine last year. That makes New York the second-biggest state for Google-driven economic activity, trailing only California, where the company estimates it generated $14 billion in 2009.

How much is Google worth to the New York economy?

According to a Google analysis released Tuesday, the state saw $6.3 billion in economic activity driven by paid search-term advertising and free queries on the search engine last year. That makes New York the second-biggest state for Google-driven economic activity, trailing only California, where the company estimates it generated $14 billion in 2009.

However, it’s a little difficult to parse just how Google arrived at those numbers. Above all, the study — performed by Google’s chief economist, Hal Varian — appears geared to convince businesses of the value of advertising through Google.

The rule of thumb, said Eileen Naughton, a Google advertising executive based in New York, is that “for every dollar [spent] on Google advertising, an advertiser earns back $2.” This total is combined with the estimated value of all the clicks on free searches for businesses in the state, which Google computes are 70% as valuable as clicks on paid search ads.

While it is difficult to independently assess the assumptions at the core of Google’s study, other statistics offer a simplified view of the search giant’s far reach into New York. There are some 114,400 companies in the state using Google’s advertising programs, either as search-term buyers in AdWords or display advertisers in AdSense.

Peter Davidson, executive director of the Empire State Development, helped contextualize Google’s impact by talking about the evolution of the “I Love New York” tourism campaign. Five years ago, he said, the state’s effort to lure tourists relied primarily on a toll-free number and brochures.

Since adopting AdWords as the cornerstone of its digital presence, the tourism campaign netted 17% of its online traffic through the Google program last year. Davidson credited some $50 million in additional tourism revenue to Google.