Ebay’s report into Google Adwords.

I’ve been using Goggle Adwords since the day they started and before then I was  managing paid search on all the other providers – espotting, overture etc – so I wasn’t entirely surprised to read that ebay have investigated their spend on Adwords and found it to be ineffective and a waste of money.

The report made headlines on the web (BBC), and in the papers and many blogs picked up on the story too, with headlines like:

Google Keyword Advertising is a waste of Money.

For many people the response is “tell us something we don’t know”. But the headlines and some of the articles don’t realise the real truth.

First of all, the primary finding seemed to be with brand keywords. I have often found bidding on your brand name to be completely ineffective. If you are the only bidder and you appear number 1 in the natural search results, why spend money putting a paid listing above your free one for users to click on? In my experience, most people just click on the top link regardless, they probably don’t even know they have just clicked on a paid result.

Even if others are bidding on your brand it will probably be a waste of money as well, as they don’t have your  brand in their url, so users will most likely skip over them and click on your free listing anyway.

As for the effectiveness of paid search for generic keywords, there are many factors that control that. In ebay’s  case, users’ perceptions of them probably had a big hand in it, as did the all important quality score.

We’ve all seen the ebay ads that carpet bombed the searches we made on Google, and let’s be honest, they were not the best written and their keyword choice might not have been the most appropriate.  I’m sure things could have been improved quite dramatically.

Perhaps it was a case of agreeing a paid search budget, and the managers just made sure it was spent without optimising and increasing ROI?

There is no doubt, though, that Adwords bids can be expensive these days and paid search can be less effective than it used to be, in some of my experience anyway. But that doesn’t mean to say it is going to be a complete waste of money for everyone.

As always with digital advertising you must test and optimise and test again. Let’s hope that this report encourages people to look more closely at the paid search activity and perhaps optimise better.

The Ebay study

Consumer Heterogeneity and Paid Search
Effectiveness: A Large Scale Field Experiment

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