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Google makes the bulk of its revenue from advertising, almost £30 billion a year in fact. However that foundation of income could be threatened, as Ebay has just produced a new study that claims the adverts people are paying for, have almost no effect on sales.
“Results show that brand-keyword ads have no short-term benefits, and that returns from all other keywords are a fraction of conventional estimates,” reads the study. Ebay found that the worst returns could be found for those paying for keywords that were the same or variations on a company's brand or name. Without the paid results, people just used the organic search results – which if the page's SEO is strong enough, will be dominated by the official ones anyway.
There was some return on expenditure with new customers searching for certain products that sites like Ebay offer, but existing users or those that are at least already aware of the brand tend not to click paid links. This became a more common practice, the more experienced the users were.
Ebay did however add the caveat, that less established brands or those with less recognisable names may benefit more than larger ones.
Google didn't comment directly on the study, but a spokesperson said that in its own internal studies, it had found adverts generated a positive outcome for advertisers in most instances.
“Since outcomes differ so much among advertisers and are influenced by many different factors, we encourage advertisers to experiment with their own campaigns,” the Google spokesman added (via Reuters).
KitGuru Says: I can't say I ever really click on the paid ads in a search. What about you guys?
I literally never click paid ads. And I teach people not to either, they’re very unreliable and the actual search results are usually much better and more relevant anyway.
We don’t pay for Google Ads anymore or advise people to bother unless they really have the extra capital to spend. After a year long campaign we didn’t see much more of an increase in sales to justify spending the extra £100’s a month. We still see more return from full page glossy local publication, national magazines and direct mail campaigns. Unless you keep up to date are clued up to how Google changes it’s algorithms and best practise tactics every few months, it’s simply better to have a SEO firm do it, then the cost is 4 times more for some even more unguaranteed results. I’ll pass thanks and agree they really are becoming ineffective, pity as it once worked wonders.