What if eBay Is Right and Paid Search Is Worthless?

  |  April 1, 2013   |  Comments

Search works, but only if, as a brand, you know what it's worth to you.

By now, everyone in the search marketing industry has read either the full study recently conducted by eBay about search, or has at least seen some of the coverage of the report. For those too busy focusing on transitioning to Google's Enhanced Campaigns, the highlights are this:

  • EBay conducted a study that found that for its own brand terms, paid search was ineffective and a negative cost versus simply relying on organic queries alone.
  • Further, eBay found that on generic terms, the value was questionable at best.

This research has garnered mainstream coverage in the trades, leading more than a few C-suite executives to question their own investments with Google. And for that I say, "Thanks, eBay."

Just as the idiom goes that no publicity is bad publicity, so should it go that no questioning of media value is a bad question. For years we have worked with brands to measure the influence of paid and organic search in tandem and isolation. We've measured paid and organic versus TV, social media, and all other forms of digital media. It's what you have to do in this interconnected consumer world.

So, I applaud eBay for doing the work and determining that for its brand search doesn't hold the value. But, take a moment and name the largest competitor to the following companies: Coke, Apple, Nike, Ford, and eBay. I bet the first four were much easier to answer than eBay. In fact, you could make the case that there's only one eBay and it fulfills a very unique space with minimal direct competition.

Which is one way of pointing out that while search may not work for eBay, it's also not struggling to achieve digital shelf space on Google or any other search engine. The biggest point of contention for eBay was around branded terms. Anyone in this space knows that branded terms for a well-known company with minimal competition represent a small fraction of total search investment, likely as CPCs in the pennies, not dollars. So, while eBay has started a public discussion of the value of search, it's very difficult to suggest many brands could take the same approach. One of the most underrepresented facets of paid buying, even with strong organic placement, is the competitive click share prevented by presence. Since eBay does not run the threat of this, organic can do more lifting with minimal repercussions.

It's obvious that eBay uses search in the purest form: direct response, down funnel conversion. Brand building is not part of the equation, and as such, every word has a value. And when the cost exceeds the return, it ceases to be of interest. In that, I wholeheartedly agree with eBay. While eBay has suggested it is swearing off branded keyword buys, it's still active on PLAs and with non-brand keyword buys.

Here's the thing. Search works, but only if, as a brand, you know what it's worth to you. Too often brands allow outside influences (competitors, corporate vanity of presence, top-line revenue) to shape their buying strategy. Just as damaging is taking what eBay has published as anything more than one unique company taking a curious public position around corporate buying choices. It's not dissimilar from GM's declaration of Facebook failing it.

Brands need to understand what search is worth to them. Accepting this study as gospel is no more palatable than accepting the long-standing Google view that if it's delivering, you should just keep writing checks. There's a proper brand point of investment in search for any company, just like any other media channel.

The truth is it doesn't really matter if eBay is right for anyone but eBay. Whether eBay is an anomaly or spot-on is far less important than knowing: What is your paid search value point? And are you constantly evolving your measurement to ensure you know the worth at all times?



Chris Copeland

Chris Copeland is chief executive officer of GroupM Next.

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