Disadvantages Ebay

eBay: SEM “Ineffective”

The company discontinued paid search ads containing brand (eBay) keywords for a limited time. It also looked at the impact of paid-search using non-brand terms. The studies have seemingly rigorous methodologies. In both cases eBay claims it saw little or no impact on traffic or sales from ending the SEM campaigns.

Branded keywords — eBay argues that the impact of ending branded paid-search campaigns was negligible because people clicked on eBay’s organic links:

The evidence strongly supports the intuitive notion that for brand keywords, natural search is close to a perfect substitute for paid search, making brand keyword SEM ineffective for short-term sales. After all, the users who type the brand keyword in the search query intend to reach the company’s website, and most likely will execute on their intent regardless of the appearance of a paid search ad. This substitution is less likely to happen for non-brand keywords…

Non-branded keywords — The company found a marginal traffic impact after discontinuing non-branded SEM but no impact on sales:

Search advertising only works if the consumer has no idea that the ?rm has the desired product. Large ?rms like eBay with powerful brands will see little bene?t from paid search advertising because most consumers already know that they exist, as well as what they have to offer. The modest returns on infrequent users likely come from informing them that eBay has products they did not think were available on eBay. Active consumers already know this and hence are not effectively in?uenced.

The company argues that SEM only works in instances where consumers are nearly totally ignorant of a brand and its offerings. By not-so-subtle implication eBay urges other well-known brands to stop using SEM:

“This begs the question: why do well-known branded companies spend such large amounts of money on what seems to be a rather ineffective marketing channel?”

If eBay is correct and other marketers take its research and recommendations seriously there are some profound implications for not only Google but the SEM industry as a whole.

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Date: 11-06-2016, 15:51
Category: Disadvantages

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