We present results from a series of large-scale field experiments done at eBay that are designed to detect the causal effectiveness of paid search advertisements.

Results show that brand-keyword ads have no short-term benefits, and that returns from all other keywords are a fraction of conventional estimates.

Just taking a look at this new research from eBay on PPC investments.

It shows the importance of questioning and testing media investments.

But I think it’s dangerous to read too much into the research since eBay’s brand strength is such that they have limited competition for the type of purchases made there and you would expect PPC ads to cannibalise the organic listings. I’ve seen tests from UK brands that show that brand-bidding DOES drive incremental business. You will also notice that Amazon continues to bid aggressively on AdWords and I know they test AdWords ROI extensively.

You may also know that eBay used to advertise on a huge range of keywords in a less targeted way than most businesses. The report acknowledges that eBay advertises on over 70 million keywords – you maybe saw the eBay ads for “nuclear fission”?

What businesses want from paid search is to drive awareness and sales from people who don’t know a brand and behind the main headlines and articles written about this report there is evidence that PPC is effective:

”_We find that SEM accounted for a statistically significant increase in new registered users and purchases made by users who bought only one or two items the year before.

For consumers who bought more frequently, SEM does not have a significant effect on their purchasing behavior_”.

This review of the research in Search Marketing Standard Does eBay’s Research Reflect The Effectiveness Of Paid Search? reminds us that other general studies such as that by Google (naturally) showed that across their advertisers “89% of paid search clicks are “incremental,” while roughly 66% of all ad clicks occur in the absence of an associated organic search result”.

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