Chapter 8. Appendix
AdWords Impact Model
Assumptions used to build the model:
Total ad spending by SMBs ⇒ average of these two $5.4 billion in 2010, according to this article  from BIA/Kelsey.
$2,300 * # of SMBs in 2011. This survey estimates online ad spend at $2,300 per SMB in 2011.
Share of ad spending on Google AdWords ~29%. This is a product of the numbers below. By 2010, 37% of online ad spending will go to paid search. 
Google owns 80% of ad spend on paid search. 
37% * 80% = 29.6%
Google multiplier = 8.  We conservatively estimate that for every $1 a business spends on AdWords, it receives $8 in revenue through Google Search and AdWords. Thus, to derive the economic value received by advertisers, we multiply our AdWords revenue on Google.com search results in 2011—what advertisers spent—by 8.
- Google owns 80% of ad spend on paid search. 
Model '(Total online ad spending by SMBs) $5.4 billion * (share of ad spending on Google AdWords) ⇒ 37% (online search) * 80% (Google share) * 8 (this is the Google multiplier: $1 of ad spending ⇒ $8 revenue) = Economic impact of Google AdWords = $12.8 billion
(# of SMBs without a website ) 1,590,000 * ( EconImp_Goog_SMB ...