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A report by auction website eBay has found that paying for advertising in the form of keywords on search engines has little effect on sales.EBay Study Questions Advertising On Google [bbc.co.uk]
The eBay study found that most people who clicked through as a result of this service were loyal customers who would have come to the site anyway.
"Incremental revenue from paid search was far smaller than expected because existing customers would have come to eBay regardless, whether directly or through other marketing channels," said an eBay representative.
In carrying out the study, presented at an economics conference held at Stanford University, eBay removed its paid-search keywords from MSN and Yahoo platforms in the US, while retaining them on Google.
They found that without the advertising, users still clicked through as the results appeared on the search engine anyway.
"Removal of these advertisements simply raised the prominence of the eBay natural search result," read the report by Thomas Blake, Chris Nosko, and Steve Tadelis from eBay.
joined:Feb 25, 2011
because existing customers would have come to eBay regardless
Platforms such as Google and Bing offer companies the option to "buy" words. This means their websites appear more prominently if a person searches for a particular term.
got "company name" at the top of the SERPS with an ad
The thing is ... the way Google is about the "quality" of keywords, ads, and landing pages, it's quite likely that any AdWords ad for a site will only appear when the site itself is in the search results.