eBay Economists’ Study Reveals That Paid Google Searches Don’t Work

Researchers from eBay recently released a study confirming what a lot of business owners have long suspected: Google search advertisements don’t really work.

Search marketing is a tactic in which a company “buys” a keyword from a search engine such as Google. The company’s sponsored website appears at the top of the page (commonly with a beige background), and unpaid sites follow below. But last year, eBay conducted a controlled trial to see what would happen if they stopped all purchases of search ads containing the word “ebay” on Yahoo and Microsoft search engines, while continuing their regular purchased search ads on Google as a control.

The results of the study are a game-changer for companies looking to purchase search keywords for marketing: eBay sales via Yahoo and Bing were unchanged compared to those on Google. Since there was no sponsored link, consumers simply clicked on the unpaid link, benefiting eBay without giving a penny to the search engine.

Revenue from paid Google searches was negligible. In the second part of the experiment, eBay shut off all Google search ads in a third of the country, but continued paid ads everywhere else. They found that there was no sales benefit from regular eBay users, and paid ads generated only about 25 cents per dollar of ad expenditures.

Benefits were limited to specific targeted keyword groups. While there was no benefit for a branded keyword, targeted keywords such as “used piano for sale” were beneficial because eBay’s ad would appear ahead of local music stores.

Since keyword advertising costs companies billions of dollars each year, you would be wise to determine if it is effective. Call 888-791-2150 today or click the link on this page to download a free sample chapter of our Great Legal Marketing book for more information on paid search ads for law firms.

Ben Glass
Ben is a nationally recognized expert in attorney marketing and the owner of Great Legal Marketing.
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