Ebay recently released an extensive research study that has been reported by some of the big media outlets such as the BBC with headlines like “Google advertising value questioned by eBay”, “eBay: Our paid Google advertising was a total waste of money” or “eBay study dismisses value of advertising on Google”
The study claims that Google’s paid search platform AdWords and bing’s Bing Ads were not worth the investment for big name brands. The results showed that for every dollar they spent eBay only recouped 25 cents in revenue, and that most people who clicked on a paid ad were already loyal customers who would have come to the site eventually anyway.
This looks like an excessive waste of money for any organisation, but for eBay one has to understand the scale of their paid search budgets. According to Tom Fastner, a senior staff member at eBay, they are currently tracking 170 million keywords and keyword combinations through an automated bidding system that will work out what they are willing to pay across Google and bing to achieve a top 5 ad placement.
Let’s put this in context for a second. That’s 1,000 times more keywords or keyword combinations than words in the English language, according to the Oxford English Dictionary.
So we all agree that their search campaign is enormous, but what is the quality like, and could this be a clue to why they don’t see a positive return from their PPC budget?
Anyone who has worked in SEM for any length of time can’t fail to have noticed some the ludicrous ads that the likes of eBay and Ask seem to run with. A blanket approach is always going to lead to wasted budget; they seem to favour quantity not quality. This then makes it seem obvious that they found that Google, or bing for that matter, were not cost effective.
Here are a few examples of unfortunate ads produced by this approach (which are no longer live) but are just the tip of an epic iceberg when it comes to a scatter gun approach to PPC keyword expansions. I’m sure you could have hours of fun finding your own examples.
And we haven’t even begun to consider that some of their ads are simply badly written (and still live) – perhaps those who click through don’t actually find what they are looking for? Maybe it’s the workman, not the tool!
Perhaps not trying to cover every generic search imaginable would be a good starting point towards better Return on Investment, but if you do use this approach you have to accept that while it is scalable to an unimaginable size, the tactic has down sides. The fact that eBay are continuing to spend with Google seems to suggest that it’s not entirely wasted money.
Read the report here: