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Sorry, eBay – SEM is Effective

eBayEarly this week, eBay released a study that incited controversy in the online marketing world; the ecommerce giant stated that search engine marketing, as well as paid search advertising, was “ineffective”.  This claim was based upon eBay’s study, conducted by its own internal economists, who turned off the company’s Google-based ads and strictly managed its set of ads elsewhere on the Web.  The company states that they noticed no significant in decrease in site traffic and conversions when the ads were taken down.  Furthermore, the study states that even when the ads were kept up and used, the high cost of the ads outweighed the sales benefits they generated.  These preliminary findings fuel SEM detractors’ arguments that paid search ads are too expensive and their results are too difficult to measure to make them effective marketing tools.  However, we couldn’t disagree more.

The most important thing to note about eBay’s findings is the quality of ads they run, and the keywords that they use.  eBay’s marketing creativity is notoriously weak; for years, they used the same generic copy on all of their ads.  Variations of “Buy it cheap on eBay” and “Save Money at eBay” appeared on every ad.  PPC experts, like us, will tell you that in order to get worthwhile results out of your paid search campaigns, you need to first identify the groups you are trying to reach, and to write specific content aimed at each of those groups.  It’s easy to see why eBay didn’t see any change when they took down their ads; their ads weren’t very good to begin with.

Furthermore, eBay’s ads employ some of the worst dynamic keyword insertion (DKI) tactics we (or Wordstream CEO Larry Kim) have ever seen.  Dynamic keyword insertion, where the ad takes the exact search terms the user typed in and places it directly in the ad, can be successful when used strategically.  The way eBay uses DKI is definitely not strategic.  Below are some examples of eBay’s “innovate” DKI ads:

Historically, eBay has used DKI to place such terms as “love”, “loneliness”, and “babies” as well as other items that you probably shouldn’t try to buy from a reseller.  DKI only works when you choose keyword queries that match your product and industry. eBay went with the kitchen sink approach, and therefore had poorly performing ads.

We aren’t alone in thinking this, either.  Google released its own study in 2012, stating that SEM helped advertisers immensely, especially in cases where there was a high level of competition in organic search.  What’s important to note about Google’s study is that it was conducted in late 2012, after the search service changed its Google Shopping service to a paid search format.  eBay conducted its study in early 2012, before this change.  If eBay conducted the same study now, it might notice a much higher discrepancy between its search results with paid results and without them.

inSegment Search Engine Marketing Company firmly believe that PPC is not only successful, but that its results are highly measurable.  Our clients always receive scheduled reports and updates on the results of all of their paid search campaigns, so they know exactly what they are getting for their money.  If you want, eBay, maybe we can take a look at some of those ads for you.


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This entry was posted on March 20, 2013 by in Internet Marketing.
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