eBay was happy to tell all and sundry that its paid Google advertising was a total waste of money last week, but it would appear that paid search has its proponents.
Simon Yeoman, GM at web hosting firm Fasthost, believes that the critical report by eBay was fundamentally flawed because of a "big oversight" on behalf of the bid firm.
The study analysed the effectiveness of paid search by removing eBay’s paid advertising from search engines such as Google, Yahoo and Bing! for a trial period to see the effect on sales.
According to eBay, most visits were shown to come from organic search, and are your loyal customers who would’ve have chosen to visit the site anyway.
“The results show that almost all of the forgone click traffic and attributed sales was immediately captured by natural search. That is, substitution between paid and unpaid traffic was nearly complete. Removal of these advertisements simply raised the prominence of the eBay natural search result.
“Shutting off paid search advertisements closed one (costly) path to a ﬁrm’s website but diverted traffic to the next easiest path (natural search), which is free to the advertiser,” said the report.
The report, is of course, an analysis of eBay's paid search strategy, and therefore is claimed to be inconclusive of the effectivenesss in general.
Responding to the report, Yeoman said this proves that paid search marketing has a new role for today’s consumer and only using direct sales is too narrow a measure in gauging effectiveness.
“The report has made a big oversight," he said. "While it is fair to say that less frequent web users may be more influenced by search marketing tactics as a direct sales route, it may not be the channel that is wrong, but the execution of the activity.
“As customer knowledge and expertise around online tools – such as price comparison websites – increases amongst the majority, so has the complexity of how a customer researches and subsequently arrives at a preferred provider that fits their requirements. In a similar vein, the awareness of pay-per-click amongst the public has led to increased suspicion, but on the flipside, optimising PPC alongside search engine optimisation will drive relevant traffic that is profitable.”
Yeoman warned: “If a business stops using a channel to market, the immediate impact may be an increase in efficiency. However, over time businesses may see their online performance drop due to the loss of the ongoing awareness that the channel was generating.
Do you agree with the findings in eBay’s report or, like Yeoman, believe the report has made a ‘big oversight?’