• RyanMJones

    I think what the ebay study is missing, is the intent of the brand keywords. IN the case of a search for “ebay” “yahoo” “facebook” etc – the searcher is using the brand as a navigational keyword. I would say that in the case of navigational keywords, SEM does only provide marginal value. But branded keywords are different for each brand/niche. Some brand searches are navigational, others aren’t. They should be treated different and different results will be shown.

    I think the key learning from the ebay data is that all brands are different when it comes to paid search, and each brand should do their own testing to see what works and doesn’t work rather than just apply the same principles.

  • http://twitter.com/JeffreyGroks Jeffrey Eisenberg

    Not everyone has eBay’s brand to rely on. Also, eBay has major credibility issues in regard to how it uses paid search – see http://www.bryaneisenberg.com/how-can-you-evaluate-this-kind-of-performance/

  • http://www.facebook.com/profile.php?id=100002917249469 Greg Chiponda

    i find very little use in paid seo for branded keywords unless u wan to take traffic from competitors

  • http://twitter.com/christawatson Christa Watson

    OK folks, is ebay really comparable to 90%+ of the market bidding on branded terms or even using paid search in general? Should we all stop bidding on branded terms because ebay conducted a huge study and finds it to have absolutely no impact on sales for them? Do we all use the same landing page or website templates for each client and industry? No. Every effort whether it be with organic or paid should have a strategy behind it, a testing period, and review of value and return on the investment. I have done plenty of these tests on smaller or no name brand clients where bidding on branded (and competitor) terms has actually increased not only awareness but increased organic branded search queries. So the obvious statement here is don’t just listen to what Ebay or Google tell you – test it out on your own and find out.

  • Colin Guidi

    I truly don’t think a company with such ecomm domination can say that SEM is pointless for EVERY BRAND. Ebay may not need to spend those dollars, due to the large amount of consumer mind share they host, and strong organic presence. For smaller brands however, SEM proves highly effective.

  • Chris Zaharias

    People (author included) need to read the eBay study itself and not just another’s summary of it. My summary after reading the whole thing: eBay tested turning both Y!/Bing & Google paid search on & off, and found two key results:

    ON BRAND KEYWORDS
    p10: total Bing/Y! click volume was only 5.6% lower after suspending paid ads, but [p11] only 0.529% lower after adjusted for seasonality.
    p11: When Google ads were turned off in 1/3 of DMAs, traffic was only 3% lower, and though no control was done, were one to exist it probably would’ve been much closer to only 0.5% lost.
    Key takeaway: brand keywords have no value for a well-known brand such as eBay (CZ – this is not entirely controversial, though brand SEM is 25-75% of all SEM spend)

    ON NON-BRAND KEYWORDS (NBKWs)
    eBay uses AdWords geo-bid to test impact of turning off NBKWs in random ~30% of 210 DMAs, and turned off brand kw’s as well, 6 weeks into this test. Findings:

    p13: “entire regime of paid search adds only 0.44% to sales.”
    p15: “True returns are an order of magnitude smaller [than the +10% spend yielding +9% sales from 'a simple OLS' POV] and no longer statistically different from zero, suggesting that even eBay’s large spending may have no return at all.”
    Key takeaway: non-brand keywords drive no value for a well-known brand such as eBay

    Now, looking at frequency & recency of user’s prior purchase history:
    p16 NBKWs generate zero incremental sales from users who buy frequently (>3x/year) [Chart 4(a) illustrates this well]
    p17 NBKWs generate zero incremental sales from users who’ve bought recently (as in last 0-90 days)
    –> Implication: “search adv’g works only on a firm’s least active customers. These are traditionally considered a firm’s “worst” customers, and advertising is often aimed at high value repeat customer.
    “Bluntly, search adv’g only works if the customer had no idea that the firm has the desired product.”
    p18: Regardless of purchase frequency, buyers use SEM for 4-5% of purchases.
    p18: “The large share of heavy users suggests that most of paid search spending is wasted because the majority of spending on Google is related to clicks by those users that would purchase anyways.”
    p18 (Sec 4.2) This is true across all demographics
    p18 (Sec 4.3) This is also true across different product/category attributes (competitiveness, market thickness, general desirability).

    Key paragraph from Harvard Business Review’s article:
    “People [...] were finding their way to the site anyway, either by clicking on natural listings, or by going directly to eBay’s site without using a search engine at all. Search ads did generate a modest increase in the likelihood that internet surfers with little recent history of eBay transactions would end up making purchases on eBay. So paid search ads serve an informational function, letting a sliver of potential eBay customers know that they’re in the guitar business. But by the time you get to customers who have had three prior eBay transactions in the last year, the effect of paid search on sales drops almost to zero. Overall, paid search turns out to be a very expensive way of attracting new business: The study’s authors estimate that, at least in the short-run, paid ads generate only about 25 cents in extra revenues for each dollar of ad expenditures. (For branded keyword searches, the additional revenues are close to zero.)”

    SEM ROI
    p22: accounting for study results, SEM ROI for eBay is -75%
    p22: for large, well-known brands like eBay, SEM sucks. That is to say, many of G’s top advertisers. Not so for smaller &/or newer companies w/no brand recognition.

  • robthespy

    And Who would want to do that?

  • Alan

    I have 4 clients who undertook similar studies. All found that after not buying their branded keyword for 2 weeks, traffic and leads from Google remained the same.

    All but 1 went back to buying the branded keyword anyway. The reason being that it pushed any possibility of a competitor showing on the front page down by one more link. Branded keywords are generally cheap so most of these clients felt it was worth the trade off.

    Interestingly the brand that chose not to go back to buying the branded keyword was the biggest brand of the group. The savings they got from not buying their branded keyword gave them more clout in un-branded keywords which they felt was a better use of advertising spend.

  • http://www.dekh.com/members/profile/13 Harsh Bawa

    Halting brand keyword advertising also resulted in no detectable drop in traffic

    and sales.

    The best thing would be to find out these things yourself rather then depending upon Ebay’s results.

  • nickdanenberg

    For sure, and as pointed out in the Larry Kim article referenced in the article, there are potentially big gains to be made from improving SEM tactics.

    In fact, we have one relevant example from last year where we doubled eBay’s pre-conversion metrics (2x Clicks, CTR) for eBay Deals Australia in split-testing.

    This was achieved not though using DKI, but the insertion of more relevant information, like Price and Savings amounts into the ads.
    So, certainly SEM tactics can be and were in this case responsible for greater SEM success. There was no access to conversion data or ROI but are such 2x improvements enough to make the cost-benfit equation work for eBay across the entire account? Only eBay can know.

    If you’re interested you can read the case study at http://www.dynamiccreative.com

  • http://twitter.com/HollyFawcett Holly Fawcett

    SEM is “inneffective”, or unnecessary, if you’re one of the world’s largest websites. Let’s not throw the baby out with the bathwater chaps!

  • Tim Daly

    I would have to agree with the Larry Kim regarding his assessment of Ebay’s marketing strategy. I’ve used their strategy as comedic fodder when speaking at SES and SMX events for years. Their strategic mistakes date back to the old “It” campaign…perhaps the most foolish integrated strategy in Paid Search history. If you’ll recall, they had african slaves, dirty diapers and prostate milk for sale. If you want “it”, they got “it”. The damage they’ve done to themselves with a poorly constructed campaign aimed to show up with no relevancy to speak of doesn’t effectively incorporate best practice and is the primary cause for their ineffectiveness.

  • treb072410

    Great post!! Really informative! I had a great time reading it!! Thanks for sharing!

  • http://babypickel.com/vincenzo.html Chenzo

    I disagree with most of this.

  • http://twitter.com/MaryKayLofurno Mary Kay Lofurno

    Not all companies have a brand as strong as ebay. This is something to test taking into consideration the product’s sales cycle. Thanks for the article.

  • Bjorn Espenes

    eBay simply is wrong on this one! We (www.finch.com) have done plenty of tests with branded terms vs. non-branded with the opposite results eBay is claiming. If you do AdWords right, the ad spend becomes sales commission to Google (vs. advertising expense) and enables you to approach ad budgets with a different mindset. Google is a a far more effective sales channel for eCommerce than anything else in my experience of providing software to eCommerce companies with automation/optimization in all channels (including eBay) for 15 years… All channels can work, how well is a function of how well you play the game!

  • Pat Grady

    Puh leez.

  • http://www.searchermag.net/ Vance Woodward

    It’s shocking to see a company as large and ubiquitous as eBay be so slow to pick up on trends in the search engine advertising market. You would think they had the resources to hire some people who actually knew what they were doing http://www.searchermag.net/google-adwords-consultant/

  • http://twitter.com/woodrailing wood railing

    “” Large firms like eBay with powerful brands will see little benefit from paid search “” How about the other 99% of businesses? What effect does SEM have for brand and non-branded keywords for the non-Fortune500 company?

  • http://twitter.com/larrykim Larry Kim

    It’s sad that (1) it took eBay so long to discover that their campaigns weren’t working – they’re were a top spender – why expand SEM spend if its not working? (2) hard to understand how no keywords in their 170 million keyword portfolio worked. I’ve found that success in SEM is about finding a niche of keywords that convert well for your business. Make sure the first million are working before expanding to the Second million (or 170th million lol)

  • Pat Grady

    Turn off your PPC, see what happens. Let the data decide.

  • Pat Grady

    We had a client who we were attributing 38% of sales to PPC, we turned off their PPC (all of it, brand and unbranded) for 10 days – sales dropped showing their PPC was actually driving 53% of all sales. Am just adding fuel to this discussion, if you think the PPC attribution isn’t incremental over all, if you’re questioning it after this report, you may be so wrong that you discover you’re actually under attributing it now (not the reverse). Turn it off, see what happens. I dare ya! :-)

  • Alan

    Par for the course here at SEL. Summarize a summary of someone elses summary. Great information. More here than the original article.

  • http://twitter.com/jkeys1313 Jason A. Keeler

    Adwords works. Period…but you have to have compelling ad copy, sensible landing pages and focused keyword groups (not carpet bombing everything under the sun). Just do it right, and all is well, regardless of how big you are…

  • Phil Segal

    It doesn’t take a rocket scientist to figure out that Brand traffic is not a good investment of capital. Clearly the searcher’s intent is to find your business. It’s like paying for your Direct website traffic.

    That assumes, however, that a user will find your business in the organic section. Search Engines hold a business hostage in one sense because competitors can bid on those terms, above the organic listings, and poach sales. In many of the campaigns I run, advertising on competitor keywords is a very effective strategy because of how far down these searchers are in the buying cycle.

    The rest of it is pure nonsense, and I tend to agree with Larry Kim from Wordstream that eBay probably sucked at search. I’ve made a living for 5 years managing large, complex paid search campaigns with companies who don’t suck at it, and it works.

  • http://twitter.com/JBGuru Jeremy J Brown

    “non-brand keywords drive no value for a well-known brand such as eBay”

    Non-brand keywords may have little value for eBay. Other well-known brands are and should be driving value with non-brand keywords.

    Individual advertisers should be looking at their own results and running their own tests. This is a study for eBay…not a study for “well-known brands”. People are jumping to conclusions that the data doesn’t support.

    If people want more data, there are other studies out there from Google and other experiments run by advertisers. I have a Delicious tag that includes many of them if folks want to learn more:
    https://delicious.com/jbguru/PPC_branded_terms

  • Jane Carroll

    upto I saw the draft which was of $4296, I did not believe that…my… father in law woz like they say really bringing home money parttime on-line.. there mums best friend had bean doing this for less than twenty months and a short time ago took care of the morgage on their cottage and purchased themselves a BMW M3. go to, jump15.comCHECK IT OUT

  • Tally Keller

    I haven’t read the study, but it is important to note that more complicated attribution methods need to be in place to properly tie conversions to the vehicles that influences the decision. A lot of our keywords are very influential early in the purchase path, but may not get credit in a last-touch model. With fractional attribution or an algorithmic model, you may find out that your brand or generic terms (or both) play either a much bigger or smaller role in driving revenue or leads than you had previously thought.

    Also, if your products or services have a longer buying cycle than 1-2 weeks (or however long you choose to pause brand keywords), then make sure you take that into account. My company sells products and services in which many months elapse between initial touch and final conversion.

  • Chris Zaharias

    Thanks JB, that’s a great resource – I’ll check it out.

  • http://twitter.com/tedives Ted Ives

    Google’s original study (as does this new one apparently) defined “incremental ad clicks” in what is in my opinion a very misleading way i.e. as a percentage of the change in *ad clicks*, not as a percentage of the change in *organic clicks* (I think your average marketer would think “incremental clicks” would mean incremental clicks over your original organic clicks, not incremental clicks as compared to what you spent on the paid clicks during the test). I believe this skews the interpretation of the original study to make any cannibalization look much smaller than if calculated the other, more intuitive way.

    When the original study came out, I was disappointed to see this, because I felt this choice of metrics gave the study more of a flavor of amateurish and thinly veiled marketing, rather than serious and helpful research. I am looking forward to checking out this new one, but since it defines IAC the same way, I am skeptical of its utility.

    However, RKG did a great presentation of their own recent study on these issues at SMX East with some great methodology applied, and they found that in some cases, Paid search adds, in some cases it takes, and in some cases it even makes the organic clicks go up, but in each case it depends on the situation. In other words the oft-quoted statement that “1+1 equals 2.4″ should be rather “1+1 equals somewhere between 1 and 3″, and it depends on the situation. Not sure if the study was published but if someone has a link to it I’d be much obliged.

    The only rules of thumb I was able to discern from RKG’s presentation was essentially:
    1.) If positions 1-10 are filled with competitors, then bidding even on your own brand term is more like bidding against the competitors, and you’re cannibalizing them probably more than your own organic, so it’s worthwhile.
    2.) If there are no competitors bidding then it looked to me like it generally was not worth bidding on your own brand term because then you were just cannibalizing your own organic traffic.

    Other in-between situations were more murky.

  • Tim Fouracre

    Adwords works but as your industry gets more competitive the impact slows. The supply of ads is fixed but the demand goes up. http://www.clearbooksltd.com/2013/03/19/lessons-learned-from-spending-100000-on-google-adwords/

  • http://www.alanmitchell.com.au/ alanmitchell

    Hi Greg,

    I’ve identified 13 ways how branded PPC ads can add value to a business:

    http://www.calculatemarketing.com/blog/techniques/13-reasons-why-ebay-are-wrong/.

    I guess eBay’s poor performance from their brand ads is a poor reflection of their PPC strategy, rather than the PPC industry as a whole.

    Cheers,
    Alan