Google's Economic Impact - Illinois 5/25/10

Uploaded by googlepublicpolicy on 14.06.2010


JIM LECINSKI: Good morning.
On this very hot August-like morning here in Chicago.
My name is Jim Lecinski.
I'm the Managing Director for Google, Sales and Service
across the US.
But I'm based in our Chicago office here, right across from
Harry Caray's, where we've got several hundred terrific
Chicago Googlers that were proud to call Chicago home.
And I'm pleased today to be joined, of course, by Mr.
Mayor, Mayor Daley, who will be making remarks shortly, as
well as Dennis Sienko from the state of Illinois and Taylor
Mitchell, co-founder of TSS Radio, whose great space we're
in, and who we're really pleased to showcase.
And we'll hear from all these fine folks here shortly.
But it's really an exciting day for us here at Google.
And it's exciting because while Google is a place known
for innovation and known for new things and new
announcements, this morning we're going to actually make
an announcement and share an announcement with you that's
completely new, something that we at Google have never done
before, for the first time ever.
And what is that?
Well, so for the better part of the last decade, many of
you have known Google mainly as the place in your web
browser, when you go on your computer or on your smart
phone, to do a search.
Where you search to find a restaurant, where you search
to find some flowers for your spouse or your significant
other, or perhaps you search or research for something to
learn more about that you heard on
the news that evening.
And in fact, for many folks, Google has indeed become an
indispensable part of people's lives, bringing all that
information, exactly whatever it is you're searching for,
right to your fingertips.
And we've worked hard to improve that search engine
over the past 10 years of Google's existence to get you
even better and even faster, more relevant answers as we
advance with each new innovation and iteration of
Google search.
And indeed, Google, therefore, has become known in the
popular culture by each of you as a search engine.
But as of today, this morning, we're actually focusing, or
shining a light on a different aspect of Google.
And that is Google as an engine of economic growth,
literally creating revenue and growing business for thousands
of companies, large and small, across Chicago and across all
of Illinois.
And we'll focus on one of those, TSS Radio, here in a
few moments.
So for the first time ever, Google is announcing and
releasing actual economic data that shows specifically what
kind of economic impact, what kind of economic engine, that
Google has on these businesses across Chicago, across
Illinois, and across the entire country.
You can see the full report and all the data by visiting, or of course you can always
search for that.
I'm pleased to announce that in 2009, in the state of
Illinois, including the city of Chicago, the economic
impact driven by Google was an incremental $3.2 billion of
economic activity.
Let me say that number again.
Google generated for businesses in Chicago and
across the state of Illinois an incremental $3.2 billion
right into the pockets of entrepreneurs, businesses, and
not-for-profits across Chicago and across Illinois.
So you see, while we may be known as a California-based
company, in fact, I'm here today to say that Google is
very much a local Chicago, Illinois company, generating
that level of economic growth and impact.
OK, so $3.2 billion is a very large number, obviously.
How do we arrive at that number?
What's the methodology and how do we get there?
I'll quickly walk you through how this all adds up.
So when you do a search, as you're familiar with on
Google, and you type in, let's say, flowers into the search
box, you'll see a set of results on the search page.
And typically in the left-hand side, you'll see results that
Google brings back to you based on our own sophisticated
computer algorithms. Those are known sometimes as natural, or
organic results, the computer generated results.
But on the right side of the page, and often on the top of
the page, you'll also see some sponsored links.
These, of course, are paid ads that businesses choose to run,
business like TSS Radio that Taylor will tell
us about in a minute.
But these are local companies placing what we
call Adwords ads.
They have something to offer.
They can answer a question or meet a need by that individual
Chicago consumer who's looking for flowers, or satellite
radio accessories, or what have you.
And so small businesses tend to like appearing on those
Adwords ads because it's a great way to meet relevant
customers, customers whose needs they can meet.
And they only pay when a customer actually clicks on
that ad and then arrives at TSS Radio's website.
So it's a great way to drive customers and
control your costs.
So the data that we're releasing today on the
website, and you have packets of it with you, is based on
the calculation that for every dollar businesses like TSS and
across Chicago spend to place those ads on Google search
results, that advertiser earns back $2 in revenue.
So if you subtract the dollar that they spent to place the
ad, that's a net dollar in profit that goes in the
business's pocket.
So we estimate that local businesses in Chicago and
across Illinois also receive, in addition to those paid ads,
a large number of clicks on those computer generated, or
algorithmic results that I referred to earlier.
Now clearly, these clicks aren't often worth as much as
the paid click, well, because the small business gets to
control what that paid ad says, versus what Google
generates to say about a business.
So we added the value of those clicks, which we estimate are
at a ratio of about 5:1, and we discounted those to be
about 70% the value of the paid Adwords clicks.
And then lastly, any website owner, say you have a blog,
say you're a publication, say you're a content site, you can
participate in a Google program called Adsense, where
you opt to have Google place ads from small businesses or
large businesses like TSS Radio on your website.
Let's say, suppose, that we had a blog that was all about
reviewing the latest and greatest in technology and
satellite radio accessories.
TSS Radio might choose to be on that blog, in addition to
have an ad on the Google search results.
So we added the value of that into our calculation.
So when someone clicks on those ads, the publisher, the
content owner shares in some of that revenue.
And the customer shows up on Taylor and Sean's web page.
So nationally and globally, that amounts to billions of
dollars that we pay out to our partners for those Adsense
programs. And so if you see the chart here behind Mr.
Mayor, if I could draw your attention to it, in sum, there
are some 58,000 advertisers and website publishers in
Chicago and in the state of Illinois benefiting from this
economic activity generated through Google.
The net, as I mentioned, is north of $3.2 billion.
And I should also mention that there's actually a third way
that we're driving economic activity beyond business
owners and website publishers.
And that is not-for-profits.
We have a grants program, whereby 160 not-for-profits in
Illinois have received up to $10,000 a month free, given to
them by Google to drive awareness and traffic to their
websites for great not-for-profits.
So when you add it all up, with the amount donated,
that's how we arrive at that $3.2 billion in economic
activity across the 58,000 businesses.
So it's a very exciting day for us.
We're proud to be a great part of the local economy here.
But we're even prouder to drive great
businesses like TSS Radio.
And with that, I'd like to turn it over to you, Mr. Mayor
for some comments on this.
RICHARD DALEY: Thank you very much, Jim.
First I want to thank Google for their great
commitment to our city.
It's an outstanding global corporation.
It's part of the business community here
in the city of Chicago.
I deeply appreciate your commitment, not only to small
business, medium-sized business, the growth factor.
Besides that, your charitable contributions.
And what the different you have made here in our city.
And our city is very pro-business, pro-development.
And it's part of the ongoing effort to always include
corporations and businesses in the efforts of improving the
quality of life of our great city, which I think it's
extremely important to Taylor Mitchell, to Sean Harper,
co-founders of the TSS Radio.
I had the privilege of meeting many of their employees.
I congratulate their wonderful business and their commitment
of growing, and quality control as well.
But like anything else, everybody knows this is a
difficult economic time in the country.
And we have to do everything possible to improve the
atmosphere for businesses to grow, to create jobs, and to
strengthen our growth factor in small and medium-sized
businesses here in Chicago.
And that is the effort.
And technology is the key.
I think all of you know better than me how important
technology is to the future.
And it's going to change very rapidly.
It's going to change business, it's going to change
government so quick that I don't think we realize how
quick it's going to change.
And I think, unfortunately, we have to have companies like
Google who have a huge impact upon our economy and the
global economy and to work with as a partner in regards
to many efforts that the city wants applied, whether it's
maps or documents or Gmail or YouTube.
Their presence is really important to the operation of
government and businesses as well.
I launched my own YouTube--
you have to, in this day and age--
to really inform both the residents and visitors
different type of media.
And media's changing as much as government's changing and
And you have to do that in order to get responses and in
order to show what you're trying to do here in this
great city, to live, to work, and to raise a
family here in our city.
And the whole key is the human infrastructure.
We always talk about hard infrastructure.
The key is always people.
And that's one thing technology understands.
You need qualified people to deal with technology.
And we have provided, I think, an opportunity, the first of
its kind here in the country, through
World Business Chicago.
And what it was is, I found out that during this series
economy, many people in the middle class are laid off.
And these people worked their entire life.
Unfortunately in the last three years, they didn't meet
the qualifications of many of these companies with
They didn't have any technology experience.
I think about 50% were college graduates.
A good percentage were graduate students who
graduated with different degrees, but never had any
technology experience.
They're working in the workforce.
But like anything else, they evaluated.
If you didn't have the technology experience, you
were let go.
And then we found out that they earned about 40-some
thousand dollars a year.
They were about 42, 46 years old.
The oldest is 60.
The youngest is 23.
We found out that many college graduates graduating do not
have any technology experience.
This is not 40, 50 years ago.
This is this new century.
It's amazing how they're graduating people.
So what we did is the city looked at what are we going to
do with people who worked all their life, and did the right
thing for America, paid their taxes, and raised their
family, and now they're unemployed?
And so we put together Chicago Career Tech.
It's really a program to identify--
first of all, it's a pilot program.
175 people of our Chicago Career Tech program.
And what it is is to really help the middle class, retrain
the middle class, to get back in the workforce.
We paid them a stipend and also they keep their
unemployment comp.
The other thing that they do is they work six days a week.
Two days a week, what they do is, two days a
week they go to training.
Two days a week they mentor on the job.
And two days a week, they volunteer, basically, two days
a week in not-for-profit organizations.
So it's a six-day work project, which is really
unusual for America, when you think working six days a week.
It's really surprising.
And what we found out the first day is that it's amazing
how they were so excited that someone thought about them.
And they thought they were the forgotten
middle class of America.
And to see their reaction about rebuilding their lives
and getting the job, they were tired of a lot of job training
programs. They went to all these job training programs.
They put all their ads on, never got a response.
And I firmly believe you have to be able to train them.
I think Google, TSS Radio understands that.
And we put $25 million of human infrastructure money
from our parking meter human fund that we put $25
million into it.
And it's amazing the response that we received.
We hope to get more sponsors dealing with mentoring and
dealing with job performance.
I just came earlier, from a meeting this morning, from
World Business Chicago, getting more and more
companies to understand you have to
train and retrain people.
If you don't, your company, your
employees will be forgotten.
And we don't want to do that.
And Career Tech is an example.
The efforts of Google, a major global company, that has a
huge impact in working with us on these projects, which are
really important.
You cannot do it alone.
I need businesses like them.
But I want to congratulate TSS Radio for their great
I know running a small business is difficult.
But you're willing to do it.
I thank you for the number of employees that I've met that
here live in Chicago.
They're part of a new generation of younger people
moving into our city.
I deeply appreciate the center of technology, both in Google
and TSS Radio, which you are.
You're always on the cutting edge.
And I congratulate you, and thank Google for their great
commitment, not only here but across the country.
This a great corporation to work for, in the sense that
they become a partner in every city that they are located,
especially here in the Midwest and Chicago.
Thank you.
JIM LECINSKI: Thank you, Mr. Mayor.

Thank you, Mr. Mayor.
We'll now hear from Dennis Sienko from
the state of Illinois.
DENNIS SIENKO: Thank you very much.
On behalf of Governor Pat Quinn and Commerce Director
Warren Ribley, it's certainly my honor to be here today to
celebrate the relationship between TSS Radio and Google.
One of the ongoing challenges of the Illinois economy is its
diverse nature, both geographically and
But Google has proven to be a terrific vehicle to get the
word out about a client's products and services,
regardless of their industry sector, whether that client is
located in deep Southern Illinois, or in the case of
TSS Radio, here in the great metropolitan city of Chicago.
Clearly Google's vision on bringing all parts of the
world of commerce together, efficiently and effectively,
is most appreciated here in Illinois, where given the
significant financial challenges--
and we do have financial challenges, don't we, Mayor?
We recognize that those financial challenges are going
to have to be addressed through business growth and
job creation.
And Google is really, as we see it, going to play a major
role in that initiative.
Our compliments to Taylor and Sean for the growth of TSS
Radio through their relationship with Google.
And of course, the hard work and dedication of the many
staff members that you have. Clearly when smart people like
Taylor and Sean get together with a smart tool like Google,
success follows.
And as an aside, I appreciate being in the home of the Baba
Booey baseball--
I believe it's back here, is that correct--
considered to be the worst ceremonial first pitch ever
thrown in Major League Baseball.
And Taylor, compliments to you for openly admitting as I did
my Google search, and I assume you're still of this status,
to being a White Sox fan while having your facility on the
North side.
Both the Mayor and I admire your strength and dedication.
And thank you very much for having us.

Thank you, Dennis.
So we showed you some big numbers today.
58,000 businesses across Illinois, $3.2 billion in
incremental economic activity.
But sometimes it's hard to make sense of big, big
numbers like that.
And what makes it real is when you break it down to looking
at one of those businesses, and some of the $3.2 billion
that resulted from that.
And so we're pleased to have Sean and Taylor with us today.
I'd like to ask Taylor to come up and say a few words about
how Google has helped you and what this all means to you.
Welcome, thank you.
TAYLOR MITCHELL: Thanks a lot.
I'm really glad you got in that Baba Booey mention.
That will be on the Stern show tomorrow, I'm sure.
So I started this business.
I just want to talk about how this business started.
I was a Stern fan living in Los Angeles in a
400-square-foot apartment.
It's probably about the size of these pillars this way to
this wall, very small studio apartment.
And Howard Stern said he was going over to satellite radio.
And it was a huge thing for me.
And I just knew that somehow that was going
to change my life.
I mean, I didn't go to college.
I had no interest in college.
I was working at a restaurant, detailing cars on the side.
And for some reason, this moment was so passionate that
I knew I had to be involved in it.
Literally, a month after he announced that, we had started
some sort of a business based on satellite radio.
We were selling satellite radio antennas.
And I used Sean.
Sean and I were friends ever since first grade.
Sean was a business consultant living in Boston.
I was in Los Angeles starting this business up on my own.
And Sean helped bring the website in, because I had no
idea how to start a website, how to run a
business like that.
All I knew is, we had to be in this business.
So we had to push forward.
We started our business.
We started using Google Adwords.
And it was really funny.
The first time we did this, we were selling antennas.
The first time we put up an ad, and we were like, well, we
don't know what's going to happen.
And all of a sudden, we started getting sales in.
It was just kind of magical.
It was like we had a business going.
We didn't know where it was going, but it just
started that way.
Our business grew quite a bit that first year in 2005 up
until 2006 when Howard Stern came on satellite radio, it
was exponential.
It's hard to run the business because the business had grown
so much, and mostly, in part, Google.
We didn't really have much else to work with.
But Google helped us out quite a bit in that beginning.
We also started a brand and really got a lot of loyal
customers early on.
And we still have that loyal customer base.
The most important thing to us is taking care of our
customers and making sure that they like us.
If someone doesn't like us, I don't really get a whole lot
of sleep at night.
So that's not something I really want to deal with.
When things got very hectic at the end of 2005, the beginning
of 2006, I could not handle the business on my own.
I needed help.
And Sean was moving here from Boston.
So we moved the business actually from
Los Angeles to Chicago.
And I think it was like 10 degrees that February day.
It was pretty brutal.
And then our business started to grow.
We started to establish a real base for selling satellite
radio parts and accessories.
We started getting referrals from serious customer service
to our business.
And our business grew.
Here in Chicago, Milwaukee and Ashland, or Milwaukee and
Division is about where we first started.
And I lived at the location at the time.
I finally got able to not live at the business within a year.
Then we moved here in 2007.
We're up to 14 employees.
And it's just very exciting for us that this whole thing
has happened, that the mayor and Google are here.
It's very surreal.
And it's very cool at the same time.
So we have a business.
We sell satellite radio accessories.
If people need a part or a radio, they come to us.
We're very helpful.
We're different than a big box retailer, or even sometimes
Sirius XM themselves, because we're really knowledgeable.
We're all here.
We all touch the product.
We all handle the product.
We also sell FlowTV, which is a service to get mobile
We also sell Slingbox, which is another kind of TV gadget,
and iPod, iPad accessories.
I'd love for someone to take my iPad home if you want to
play around with it.
It's very cool.
So we're a strong brand.
We have a lot of loyal customers.
And Chicago's helped us.
It's a lot easier to be in Chicago in a business that
ships out products than in Los Angeles.
Everything is five days away, five business days away if
you're on the East Coast. We have a lot
of East Coast customers.
So it's very nice to be in Chicago.
And our work force, all the people at TSS Radio, really
enjoy living here.
It's probably a lot easier to operate a business in Chicago
than it would be in New York or Los
Angeles for what we are.
And I just want to thank everybody here, the Mayor, the
staff of TSS Radio, Howard Stern for the inspiration of
this business, Sirius XM.
It's all very exciting.
And thanks to everyone who put the event together.
Thanks a lot.

JIM LECINSKI: Thanks Taylor.
So you've heard a terrific success story of
entrepreneurship, made possible by the business
environment in the city of Chicago and
the state of Illinois.
TSS Radio with Google Adwords has built a great business, as
you heard from Taylor.
And we're proud of that and we're happy to be a
small part of it.
But also, the message today is that there's 58,000 other
businesses like Taylor and Sean's growing and thriving in
the Illinois and Chicago business community in
partnership with Google.
So we thank you.
With that, thank you, Mr. Mayor.
Thank you, Dennis.
Thank you, Taylor.
And we can take a question or two.

Is this the kind of business that you want to attract to
Chicago, the small entrepreneur who is going to
use technology to its advantage?
RICHARD DALEY: Yeah, sure.
The small entrepreneur that would be able to keep growing
and growing in their sales, in the number of employees.
You want them to grow.
I mean, that's what you want to be, be as
successful as they want.
And at the same time, have a passion for their business.
And to have well-educated in technology, trained employees.
And that's the atmosphere.
It's not only small, medium-sized business.
But you need large businesses, too, to have that attitude of
working with small, medium-sized businesses, both
here in Chicago and Illinois.
And this state has participated with us
tremendously in assisting all the businesses.

AUDIENCE: Do you think Chicago is doing enough to attract
this kind of business?
And then nurture them along--
RICHARD DALEY: Well, I think what we have to have, we have
to have more exposure, not of Mayor Daley, but of these
It's up to the media.
And that's why you have different type of media today
to really expose businesses like this.
You never knew, I never knew they existed right here.
Here is two young people who started this business, moved
here from California, one came from Boston.
They're located right here, in the expansion all the way from
a division in Ashland all the way here, and
how business grows.
You know, running a business is tough.
You spend a lot of time and effort on it.
But again, they need exposure.
Whether it's from Google, whether it's the state, or
Chicago, especially from the media.
These are businesses all over Chicago, but they don't get
that day-to-day exposure, or a monthly or yearly exposure of
these businesses.
I'd like to see everyone help out in giving them the
exposure that is necessary.
They can't pay for all the media.
Let's be realistic.
And they need a good outlet to dealing with highlighting
businesses like this all over the city every day, picking
one little business and say, here, let's just talk about a
couple minutes on that business would help
JIM LECINSKI: Question down here?
AUDIENCE: I wonder when Google TV comes out in the fall, are
the ads going to look the same as they do on your computer?
JIM LECINSKI: So the question was related to an announcement
we made at our developer conference last week about
Google TV. We don't have any comment on that yet.
That's still a product in development, and we haven't
announced any advertising plans yet.
Another question?

DENNIS SIENKO: I've just got one quick comment.
DENNIS SIENKO: In terms of one thing I do want to mention is
Sean and Taylor moved from California.
But Sean actually did both his undergraduate and graduate
work, as I recall, at the University of Chicago.
And the network of incredible universities that we have here
play a real important role in this kind of development of
great talent and great technology.
JIM LECINSKI: OK, well with that, we'll close.
Thank you very much for coming.
Special thanks to Taylor and Sean, to Dennis from the
state, and of course, Mr. Mayor.
Thank you all.