eBay (EBAY) Study Questions Value of Paid Search Ads (FB) (GOOG) (YHOO)
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Facebook (Nasdaq: FB), Google (Nasdaq: GOOG), Yahoo! (Nasdaq: YHOO), AOL (NYSE: AOL), and other major Internet names are on watch today as one large retailer called into question the value of its ad spend.
Last Friday, eBay (Nasdaq: EBAY) released a study highlighting whether or not its paid search results on Google were worth the investment. One spokesperson for eBay wrote to Reuters, "The conclusion: 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."
For the aforementioned names, this could present an issue. Bigger names like eBay, Amazon.com (Nasdaq: AMZN), and General Motors (NYSE: GM) are recognizable by themselves; customers will simply go to the company's website rather than running search first.
The analysts at eBay reviewed results after halting the purchase of Google search ads in some regions, while maintaining purchases in other regions for comparison. The test ran from April 2012 through July 2012. In all, the study found that there was "no appreciable drop in sales" in places where the Google ad purchases were stopped.
The study also noted that each $1 spent on ad revs produced 25 cents in incremental revenue gains.
While the study might work for larger companies, the same can't be said for smaller outfits. eBay even said that paid search ads might work better for some companies than others.
For the full study, click here.
Last Friday, eBay (Nasdaq: EBAY) released a study highlighting whether or not its paid search results on Google were worth the investment. One spokesperson for eBay wrote to Reuters, "The conclusion: 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."
For the aforementioned names, this could present an issue. Bigger names like eBay, Amazon.com (Nasdaq: AMZN), and General Motors (NYSE: GM) are recognizable by themselves; customers will simply go to the company's website rather than running search first.
The analysts at eBay reviewed results after halting the purchase of Google search ads in some regions, while maintaining purchases in other regions for comparison. The test ran from April 2012 through July 2012. In all, the study found that there was "no appreciable drop in sales" in places where the Google ad purchases were stopped.
The study also noted that each $1 spent on ad revs produced 25 cents in incremental revenue gains.
While the study might work for larger companies, the same can't be said for smaller outfits. eBay even said that paid search ads might work better for some companies than others.
For the full study, click here.
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