Google makes the bulk of its revenue from advertising, almost £30 billion a year in fact. However that foundation of income could be threatened, as Ebay has just produced a new study that claims the adverts people are paying for, have almost no effect on sales.
“Results show that brand-keyword ads have no short-term benefits, and that returns from all other keywords are a fraction of conventional estimates,” reads the study. Ebay found that the worst returns could be found for those paying for keywords that were the same or variations on a company’s brand or name. Without the paid results, people just used the organic search results – which if the page’s SEO is strong enough, will be dominated by the official ones anyway.
There was some return on expenditure with new customers searching for certain products that sites like Ebay offer, but existing users or those that are at least already aware of the brand tend not to click paid links. This became a more common practice, the more experienced the users were.
Ebay did however add the caveat, that less established brands or those with less recognisable names may benefit more than larger ones.
Google didn’t comment directly on the study, but a spokesperson said that in its own internal studies, it had found adverts generated a positive outcome for advertisers in most instances.
“Since outcomes differ so much among advertisers and are influenced by many different factors, we encourage advertisers to experiment with their own campaigns,” the Google spokesman added (via Reuters).
KitGuru Says: I can’t say I ever really click on the paid ads in a search. What about you guys?