back to article eBay: Our paid Google advertising was a total waste of money

eBay has claimed that Google's paid search ads aren't worth the money for big-name brands, after it conducted a study showing that found it was only getting 25 cents back for every dollar it spent. eBay Research Labs looked at the online bazaar's sales after it gave up on search ads in some regions but left them on in others. …

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  1. Anonymous Coward
    Joke

    Do know evil

    "In any Google search for a well-known brand like eBay, Amazon or John Lewis, that firm's site is going to pop up at the top of search results anyway..."

    Until they stop paying for ads.

    1. Shannon Jacobs
      Holmes

      Re: Do know evil

      What's the joke? The google really is EVIL these days, and more so all the time.

      These days it seems like google's main concern is how to prevent complaints about the gmail-based spammers. If that isn't EVIL, I'd be curious what qualifies.

      I'd think that google would resent the competition from the spammers, or maybe they would be concerned about the value of the brands that are being abused to death by the spammers. Where does the self-interest go south?

      As someone who used to think the google was going to help make the world better, I now feel like a bigger sucker than an ebay shopper.

      1. Anonymous Coward
        Windows

        Re: Do know evil

        Oh yeah... Google is Evil !!! :P get a life. They are an org out to make a buck like every other org. Except they go out of there way to help you every now and then. If you dont believe me go ask the tens of thousands of small businesses who have started up PURELY because of Google Organic search.

  2. Peter Galbavy
    Trollface

    sigh

    Could be because every time I see "eBay" in an add or on Google Shopper I simply think either "scam" or "fraud". Perhaps they have an image problem?

    1. Danny 14

      Re: sigh

      indeed, at least you can still boolean -ebay

    2. Anonymous Coward
      Anonymous Coward

      Re: sigh

      When I first started using ebay it had less than 100,000 users, and since then I've bought over 100 items without a single problem. I don't know where this fear of scams on ebay comes from.

      1. csumpi
        Black Helicopters

        Re: sigh

        I've been scammed as a seller. Sold an item for $200 (it was worth a lot more), buyer sends me a message that it's not as described (not true). I give him my phone number, never calls me, keeps sending nasty messages. I tell him to send it back. He doesn't want to. He contacts ebay, who investigate. They put a lock on my money on paypal. They tell the buyer to send the item back. He refuses. No way to contact anyone live at ebay. Took two months to release my money.

        1. JamesC
          FAIL

          Re: sigh

          Have been in exactly the same situation as you. I'd already withdrawn the funds from Paypal, which gave me a negative balance.

          Not able to use Paypal to purchase anything when you have a negative balance, all because somebody is trying to scam me.

          Nobody at Paypal or Ebay was able to respond to my queries in less than 7 days. Will not be doing business on Ebay or with Paypal again.

      2. Sorry that handle is already taken. Silver badge

        Re: sigh

        I don't know where this fear of scams on ebay comes from.

        Might be from the scams on ebay. Just a thought.

      3. Anonymous Coward
        Anonymous Coward

        Re: sigh

        " I don't know where this fear of scams on ebay comes from."

        Try selling stuff, then. That's who gets scammed, both by buyers and by Ebay, who always side with buyers and are ruthless towards sellers.

        1. Keep Refrigerated
          Alert

          Re: sigh

          It's not just sellers getting scammed - buyers too.

          Anecdotal evidence I know, but I paid for something that never arrived and tried emailing and calling the seller. Eventually got Paypal involved and the seller sent Paypal a scan of a postage receipt... for a completely different name+address.

          Paypal accepted that as evidence and closed the dispute. That was where my relationship with Paypal and eBay ended. Will never use them again.

  3. Turtle

    It's simple.

    "In any Google search for a well-known brand like eBay, Amazon or John Lewis, that firm's site is going to pop up at the top of search results anyway, so an extra paid ad isn't really necessary."

    Oh yeah? Well it might well *become* necessary when Google changes its algorithms to penalize eBay, Amazon, John Lewis (and many others), if they start to think that they don't have to help fund Google's bottom line.

    "A spokesperson for eBay told The Reg in an emailed statement that the study wanted to find out why large firms were spending so much money on paid search."

    It's not rocket science, for fuck's sake;: the answer is simple: they're stupid and gullible.

    1. Psyx
      Facepalm

      "A Google spokesman ...[said]... the company's own research had different results."

      Stop Press: Company that sells advertising says that advertising works, based on a study they did themselves.

      1. This post has been deleted by its author

      2. Ken Hagan Gold badge
        Paris Hilton

        Re: "A Google spokesman ...[said]... the company's own research had different results."

        We need a Mandy Rice-Davies icon.

  4. Anonymous Coward
    Anonymous Coward

    Adblocker is your friend

    In your face google!

    1. Anonymous Coward
      Anonymous Coward

      Re: Adblocker is your friend

      There are adverts on the internet? When did this start?

  5. sabroni Silver badge

    Except..

    ..EBay aren't the only people who can buy the search term eBay and place ads on it. Look for Firefox on Google, the free download links on the top aren't from Mozilla.

    You may own "mybrand.com" but if someone else is paying for "mybrand.com" ads they can put whatever they like above you in the search results and that can have an effect on your public image. It's almost like Google have you over a barrel....

  6. Irongut

    Maybe if they bought relevant ads?

    The problem here isn't that eBay bought ads for the term eBay. The problem is no matter what I search for I get ads for eBay. I could search for Global Thermonuclear Meltdown and get ads saying "Buy Global Thermonuclear Meltdown at eBay!" Now I'm assuming they don't have that for sale...

    As a result I ignore any ad for eBay on Google. Even if I'm searching for a product that they might actually have on eBay I won't click one of their ads because I'm expecting it to be useless.

    1. TeeCee Gold badge
      Coat

      Re: Maybe if they bought relevant ads?

      "Buy Global Thermonuclear Meltdown at eBay!"

      Now available with free worldwide shipping from North Korea......

      1. Lockwood

        Re: Maybe if they bought relevant ads?

        I have had eBay offer to sell me Wales before now.

        1. dogged

          Re: Maybe if they bought relevant ads?

          I have had eBay offer to sell me Wales before now.

          Reserve not met.

        2. Captain Obvious
          Coat

          Re: Maybe if they bought relevant ads?

          Sure you didn't mean "Whales?"

          Maybe you were on the Japanese section of eBay :)

          1. Voland's right hand Silver badge
            Devil

            Re: Maybe if they bought relevant ads?

            Quote; Sure you didn't mean "Whales?"

            It has offered to sell me the capitals of two european countries, an island in the Canaries group and a few others like this.

            The reason for this is eBay are idiots - they have exported their search term lists which included "location" additions to the search done by people to lazy or clueless to use the eBay distance to seller search facility. That term got dumped into adwords. Of course this will have negative ROI. It would have been surprising if it had given a positive one. Any search for Rome resulted in an eBay ad being displayed (and charged for) "Do you want to buy Rome" (Rome being an example - I had that one with another Eu capital).

        3. Dick

          Re: Maybe if they bought relevant ads?

          How much were they asking?

        4. Allan George Dyer

          Re: Maybe if they bought relevant ads?

          @Lockwood: How big was it?

          1. hplasm
            Happy

            Re:@Lockwood: How big was it?

            One.

        5. S4qFBxkFFg
          Joke

          Re: Maybe if they bought relevant ads?

          If the seller's username was something like OsborneGid12, I would not have a problem with this method of reducing the national debt.

      2. Longrod_von_Hugendong
        Devil

        Re: Maybe if they bought relevant ads?

        'Now available with free worldwide shipping from North Korea......'

        Given normal North Korean quality, it would have to be 'for collection only'

        1. TeeCee Gold badge
          Joke

          Re: Maybe if they bought relevant ads?

          From a seller called "dearleader3".

          You may be right though, his feedback ratings are terrible.

    2. Don Jefe

      Re: Maybe if they bought relevant ads?

      I agree. It seems eBay just went way overboard on their search terms. If you actually click on some super specialized item ad the result is almost always "not found here's some unrelated bullshit you might like".

      It seems to me eBay shot themselves in the revenue foot on this too. I would have offered it as a listing upgrade for the seller to get their listing on Google.

    3. Psyx
      Happy

      Re: Maybe if they bought relevant ads?

      "Global Thermonuclear Meltdown"

      Nah: No Ebay links. Facebook are the top two natural search links, and your post is number 9. Even under shopping there's only 1 hit and it's not Ebay.

      I'm quite surprised.

      Also quite bored at work to be doing this!

    4. Phil Endecott

      Re: Maybe if they bought relevant ads?

      Best ever example of "you can buy anything on ebay":

      http://www.lifeinbits.org/?p=123

  7. Anonymous Coward
    Anonymous Coward

    Paid search results

    You mean the ones that are supposed to be relevant to what I was looking for, but aren't really?

  8. ukgnome
    Trollface

    I thought they dropped the B in eBay to just ebay - or is that just their logo?

  9. karlp

    Brands

    It strikes me as a bit daft for eBay to broadcast their internal findings on this matter.

    It doesn't surprise me at all if eBay has found paid ads don't bring much to the table. However that finding is going to be specific to their circumstances I would suspect. With a brand that is so strong, most people willing to deal in a non-retail environment will automatically think of them.

    If they can cut the adspend and still make money - they do it. By by brining this up, all they do is state the obvious and potentially piss off Google*.

    *And that is just bad for (any) business.

    1. Psyx

      Re: Brands

      "It strikes me as a bit daft for eBay to broadcast their internal findings on this matter."

      Why? They clearly feel Google has misrepresented the effectiveness of advertising and fibbed to them, so why not announce it?

  10. Babbit55
    Facepalm

    So you're telling me if I google "ebay" then ebay will be at the top??? if I google some other smaller company name like say "Forbidden planet" that too is the top, not even a paid add too!! How is this news?

    What about if I googled online auctions? ebay aren't top then so in this case a paid ad may actually be beneficial!

    1. TheWeddingPhotographer

      too diverse

      The thing is that if you are looking for a blue widgety thing, you will search for that. If e-bay then dominate the search for what you are looking for 9i.e. a blue widgety thing) then it is likley they will broker your sale and make fees

      The issue here is that as seller of blue widgety things, you are paying eBay a small insertion fee and a comparative small percentage of your turnover. So while you may be making a fat profit of £50 eBay may be making a profit of £2.00.. where it actually cost them £8.00 to advertise the fact that they could assist selling your widgets (not every one who clicked went on to buy

      E=bays mistake here is to market too may diverse products (at too high a price) instead of the profitable (for them) products

  11. Rob
    Coat

    Loyal Customer

    I'm a loyal customer of some brands so when I see they appear as a paid result, I click on the Ad so that they get value for money with their advertising... I really must go, I took a knock to the head earlier and it's made me feel a bit odd.

    Mine's the Gingham dress with Mr. Fibble in the pocket.

    1. Tom 38
      FAIL

      Re: Loyal Customer

      If you're a loyal customer, clicking the ad links is probably costing them money - they probably get charged per click, and you were going to go to the website anyway.

    2. Don Jefe

      Re: Loyal Customer

      I do that too :)

      In seriousness I do click on ads from some sites I enjoy, so they can keep themselves funded, but I do wonder how much this skews the results for the advertiser...

    3. stephajn

      Re: Loyal Customer

      Don't forget the army boots and blonde braids. I do believe I have a spare set. :)

    4. AOD
      Thumb Up

      Re: Loyal Customer

      Have a +1 from me for the Dwarfer reference, although Mr. Flibble's very cross his name didn't get spelt correctly.

  12. Philomena Cunk
    FAIL

    Well duh...

    ebay have such a market dominance, what did they think advertising was going to achieve?

    Everyone that wants to buy or sell on an auction site already knows about ebay, there was nothing at all to gain. They migh as well be advertising air...

  13. ZedThePirate
    Devil

    Click throughs costing more than views

    If I see a paid for add by a company that I don't like, I click it in a new window, then close it soon after.

    As the click costs them much more than just a view.. Even if they are at the top of the "natual" results.

    1. Ian 55

      Re: Click throughs costing more than views

      Ditto, but I also delete the cookies that result.

  14. Anonymous Coward
    Anonymous Coward

    Sure the returns on advertising decrease as a brand reaches 'defacto' level mind share for any given online activity, but there is also a cost to maintaining that level.

    They appear not to have considered this. If ebay is not paying for those placements, it opens them up to competitors that the searcher may not have considered or known before. Leading this searcher to another place to buy a given product.

  15. JayBizzle

    since they are the defacto auction site for the internet, why is this a surprise? they dont have the but when compared to... element to benchmark their spend, they have the monopoly anyway and a lot of internet users use the verb to ebay when looking at their crap they want to get rid of.

  16. Anonymous Coward
    Anonymous Coward

    Don't pay

    And you get demoted

  17. Dadz

    not competitive

    When buying more expensive kit such as camera lenses, often Google Shopping search results for eBay show me used or refurbished equipment which I do not want. New kit is simply not sold on eBay because eBay charges such high fees to third-party sellers that new products are not competitively priced. The exception is one-off liquidations of end-of-life new-old-stock kit, or the occasional front-page loss-leader promotion.

    Buying cheap kit such as an RF camera trigger, an eSATA multiplexer, or a camera bag, is often cheaper to buy directly from similar websites in Hong Kong or China such as AliExpress.

  18. Anonymous Coward
    Anonymous Coward

    Just 25 cents in extra revenue for each $1 spent.

    Umm am I doing my maths wrong or just mis-reading this- but that sounds like a 25% profit for each dollar spent?

    1. reno79

      Re: Just 25 cents in extra revenue for each $1 spent.

      In very simple math terms it's actually 75% loss for every dollar spent on advertising

      1. Throatwobbler Mangrove

        Re: Just 25 cents in extra revenue for each $1 spent.

        No, it's more than that - only some of the 25% revenue will be profit.

  19. Captain DaFt

    eBay foot in mouth disease

    Reading this, I'm wondering why they ever let the results see the light of day.

    Effectively, they've just told their competitors that "Using Google ads gets you more of the customers that would have used us!"

  20. ItsNotMe

    Really? I'm shocked.

    "A Google spokesman declined to comment on the eBay study specifically, but told The Reg that the company's own research had different results."

    Gee...who'd'ave thunk it?

  21. Tom Maddox Silver badge
    Headmaster

    Grammar nazi hijack

    The appropriate abbreviation for "advertisement" is "ad;" the appropriate abbreviation for "advertisements" is "ads." "Add" and "adds" refer to mathematical operations.

    This has been a note from your friendly neighborhood grammar nazi.

    1. Ian 55

      Re: Grammar nazi hijack

      I saw a tweet yesterday which reckoned that the Finnish equivalent to 'grammar Nazi' is 'comma fucker'.

      Still, they were a bit close to the originals.

  22. Pete 2 Silver badge

    Online advertising's greatest flaw

    ... is that advertisers can actually MEASURE it's efficacy.

    With good, old-fashioned advertising there was little, if any, way of telling how well a particular advertisement was working. Sure, occasionally one advertisement would go stratospheric and everyone would win an award (even if sales didn't twitch) - but the main reason for mainstream advertising was that YOU had to do it because everybody else was, too.

    With the 'net that's all changed. The old saying that: "half of all advertising money is wasted - but nobody knows which half" is no longer true - either in degree or analysis. We now know that most advertising money is wasted, either by targeting the wrong (or none) audience, preaching to the converted or being too expensive for the returns it produces.

    So, given that anyone with their finger on the pulse of their advertising budget can see where it's gurgling down the plug 'ole (to mix a few metaphors), it's a wonder that anyone still bothers with it. Until you look back at the alternatives.

    1. Vector

      Re: Online advertising's greatest flaw

      Afraid that's not true at all, at least not for all non-online advertising.

      Marketing departments have many tricks up their sleeves to monitor the efficacy of their ad spend. Things like the phone number you call or "mention this word" spiffs are markers for analysis. I once worked for a company that went so hogwild with the phone number thing that we ran out of space on our PBX for the new numbers.

  23. Donald Becker

    I'm with one of the previous posters: Why is ebay making a story out of this? There is likely some underlying reason.

    Perhaps they will be introducing a competing advertising service.

    My take is that eBay has been paying for blanket coverage on search results, regardless if they could offer anything of benefit. Until a few months ago you could search for "broken leg" and be offered "get a broken leg on eBay".

  24. LinkOfHyrule
    Paris Hilton

    Not supprised, ebay

    You seem to spam up goggle with ads for every possibly conceivable combination of search terms. I'm sure if you googled "Victorian lead pipe plumbing replacement gender reassignment surgery cupcake mistress Soho sausage meat suppliers in Stevenage grief counselling for dummies" that ebay would have brought an ad for that exact phrase!

    1. Havin_it
      Go

      Re: Not supprised, ebay

      Not any more, it seems. All I get is this page and what appears to be a password-cracking dictionary.

      Shame. I really need one of those, and the ones in Fortnum's are a bit dear.

  25. Tom 35

    Who is going to search FOR ebay?

    Just type www.ebay.com/ca/co.uk...

    If they are talking about the "buy_____ on ebay" Links where _____ is what ever I was searching for they are right. No one clicks on them.

  26. Oninoshiko
    Trollface

    I wonder if google

    might convence Patrick Byrne to buy advertising on the word "ebay"

  27. Local G
    Unhappy

    "Nobody ever went broke underestimating the intelligence of the American public."

    That goes for both google and eBay. They both make gazillions.'

    "it conducted a study showing that found it was only getting 25 cents back for every dollar it spent.."

    This means that for every tax deductable dollar eBay spends, 25 cents will NOT be spent at the competition. A few years of that and the competition struggles and goes out of business.

    If eBay had the wherewithal to hire a good advertising agency and put some clever ads on cable, maybe the get more users.

  28. nevstah

    i'm confused...

    with the search term 'ebay' they will always be at the top because they are the only company with that name. the same goes for john lewis.

    however, personally, if i want to purchase something from ebay, i'll search within the ebay site, not google. the same goes for other shops.

    1. Havin_it

      Re: i'm confused...

      It's far from a given that a site's own search function will be better than Google's (notwithstanding the "natural" vs paid issue). For example, some widely-used web applications *cough*phpBB*cough* have diabolical native search functions, so googling $QUERY site:www.crapsearch.co.ck will get you far more useful results.

      1. Ken Hagan Gold badge

        @Havin_it (Was: i'm confused...)

        Unless own-site-search has improved in recent years, I'd say that googling with site:whatever will never be worse, so should always be the only thing you try. Is anyone aware of sites where this isn't true?

  29. samgunter

    No kidding sherlock. We researched this 2 years ago on many large companies and found that 70% of Google PPC clicks were brand terms but companies are largely blackmailed that if they do not buy their brand terms someone else will. The value is not extra traffic, as they would get that anyway from natural search, but was to stop competitors taking traffic away!

    The conversion from non brand terms for large companies was pitiful.

    Also what tracking are you using? Low and behold its probably Google Analytics? Hold on might there be a conflict of interest for someone to sell you clicks and then tell you if it works? Doh?

    Do you know that Google has made at least 30 changes to Google Analytics to make it look better for Google ROI.

    The biggest change they made was unbelieveable. They changed the way sales were recorded. They said the sale would be recorded based on the last referred website? That means if someone types in a keyword, probably the brand term in Google, and then the next day sees a TV advert offline or maybe a newspaper ad and then decides to come back to the site directly (ie not going via Google) the purchase would be recorded in Google Analytics as a sale from "Google"? Google ignores direct visits. Its unbelievable on so many levels. The world is seriously duped and probably in the eyes of many this could be seen as large scale fraud as basically Google Analytics is ignoring the influence of any offline marketing working at all as it does not register sales against the last visit actually being direct. Take into account that most people use Google as the worlds biggest bookmark and was a brand term search you start to see a very different story. If Google had to not count any traffic from Brand term search Google traffic for many big sites would fall to less than 5% and would be insignificant. Changes need to be made on so many fronts at Google but i simply cannot understand why no one is taking with to the SFO or European union for serious investigation.

    1. Ken Hagan Gold badge

      "companies are largely blackmailed that if they do not buy their brand terms someone else will"

      Is this a problem? (*) If I search for an actual brand name, I'm looking for that brand (duh!) and will certainly not be spending money on some time-wasting lying swine who wastes my time with a deliberate red herring. If they were on my short-list (and I'm searching for each one in turn), they will be crossed off it.

      (*) Who knows? Almost certainly no-one. What passes for "analysis" in the advertising world wouldn't pass for bog-roll in the hard sciences. It's cargo cult stuff, just a story told by marketing execs to whoever sets their budget.

  30. larrykim
    FAIL

    EBbay's Ads Don't work Because They Suck

    Ebay has the worst ads on all of google - here's an analysis of why ebay failed: http://www.wordstream.com/blog/ws/2013/03/13/dear-ebay-its-not-adwords-its-you

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