eBay Slams PPC: Should You Really Stop Bidding on Brand Keywords?

March 21, 2013

There has already been a lot written about the recent study by eBay about paid search’s effectiveness for both brand keywords and non-brand keywords. Most of the posts, from Larry Kim’s on Search Engine Journal, to the recap from ppc management experts on Search Engine Watch seemed to focus on eBay’s historical and at times hysterically funny misuse of dynamic keyword insertion. I am not going to focus on those things or even point out that it didn’t work because they did PPC wrong.

I come from a unique background in PPC Management. I started off managing advertisers for a search engine (Lycos) years ago, and most recently managed all of the paid search for Fortune 500 company Choice Hotels, before breaking out into the agency world and Get Found First. So my point of view is different than some. I definitely have issues with what eBay stated but can’t say they were wrong in their findings for them. So what issues do I see with eBay’s study and their general dismissive of paid search?

What is eBay’s position when it comes to bidding on brand keywords?

Let’s start with the first points eBay makes in their case study and specifically around brand keywords. There are so many flaws in their non-brand keyword argument in general I won’t even touch much on it. So let’s take each of their arguments about brand keyword bidding and I’ll give you my take on it.

First, “brand” keyword advertising (where firms purchase advertisements on searches for their own brand name), a practice used by many companies, is ineffective because, absent paid search links, consumers simply substitute to (unpaid) organic search links. This implies that brand keyword advertising expenses have neither persuasive nor informative value to well known corporations, and arguably, for other companies as well.

Basically they are saying buying or bidding on brand keywords is a waste of money because:

  1. It provides no unique informative value
  2. Without paid search ads, users will simply choose to click the organic (or “free”) result or results.

PPC brand keyword ads provide no unique informative info?

For the first one let’s look at one of the brands they pointed out in their study and see if their ppc ad for their brand keywords provides no unique info or value.

Now I don’t know about you but it seems pretty obvious to me, that AT&T’s PPC ad (paid) at the top offers unique, informative and valuable info.

  1. First of all their PPC ad focuses on their wireless or mobile offerings instead of, DSL, U-verse digital tv, or home phone offerings which the Organic (free) listing includes.
  2. Secondly it offers current promotions by utilizing site links. I can get a smart phone for $.01 or even $100 off any tablet I want.

For someone who isn’t even in market for a tablet that peaked my interest.

Turning off brand PPC ads is ok because SEO will pick up the slack!

To their second point, that organic is going to simply pick up the traffic and sales which would have come through paid search, may be true for them, but for the majority of companies (yes even well known ones) this isn’t true.

For travel advertisers, the above search engine results page for brand keywords is an everyday occurrence. Can you count the number of ads competing for the users attention? Yep, their are 8 standard PPC ads along with the 3 Hotel Price Ads (which can each contain 3+ ads) which actually occur within the organic local listings (don’t even get me started on that).

Now if Comfort Inn (a very recognizable hotel brand) didn’t bid on their brand keywords would the user (as eBay said), “in reality… have found other channels to the firm’s website”? From what I see and the first-hand experience I have that statement is mostly false for most advertisers. True the user may have booked one of Comfort Inn’s hotels still, but it is very likely it could have come through one of the more costly booking channels like an OTA (online travel agent like Expedia), which many times get what would amount to a 20%+ commission for the booking.

Now let’s look at another example, for what has to be one of the biggest individual brands in the world… the iPhone.

What really needs to be said about this? I think the point is made that by not bidding on brand keywords it doesn’t necessarily mean that users will go to a brand’s organic listing. There are tons of other options available to them.

Must be nice to not have poachers on brand ppc keywords.

Now eBay did point out that:

one reasonable argument is that competitors may bid on a company’s branded keywords in an attempt to “steal” visitor traffic. Such behavior was absent in our studies

So for eBay this isn’t a problem they don’t see this common behavior. They have to be one of the luckiest brands out there in my experience! Most brands have competitors and others bidding on their brand terms (just look to the examples above)

The real issue is eBay saying this is for everyone.

This study would have just been interesting except eBay pushed that other large companies like theirs (including AT&T, Capital One etc) should heed their study.

These companies generally use the same methods and the same consulting firms to design their ad campaigns and there are many reasons to think that the results we presented above would generalize to these large and well known corporations.


In lieu of this ad, therefore, the user may just open a browser and type “www.ebay.com” directly into the address bar.

First since when did eBay get in the business of telling other companies of how to do their marketing? What makes them assume that all other big brands would see the same benefit? I think somebody needs to step outside of eBay Labs every now and then.

People use search engines even when it doesn’t make sense.

Secondly, getting to your site may be the users intent, but search has changed the way people do things. Notice eBay the user didn’t just open up their browser and type in eBay. IIn a huge test I did back at Choice Hotels, I found multiple users searching on brand keywords and clicking on ads upwards of 10+ times before converting. They knew the brand, they may even have known the name of the specific hotel they wanted to stay in, and yet they came through paid search, over 10 times before converting! I don’t get it, and I really didn’t get why employees of the company would come to the sites through organic or paid search ads, but it happened. This is normal user behavior now not the exception.

You can pay me whether you get results or not.

One final point I wanted to make in regards to eBay’s concerns specifically around paid search advertising, is in response to this quote from their study.

Our concern, instead, is that the amount spent on SEM (and many other internet marketing channels) is a function not only of the advertiser’s campaign, but is also determined by the behavior and intent of consumers. For example, the amount spent by an advertiser on an ad in the print edition of the New York Times is independent of consumer response to that advertisement

Huh?! You are concerned because you pay when users interacted with an ad as opposed to paying a lump sum to someone like the New York Times regardless of whether somebody responds or interacts with the advertisement? eBay maybe for your next study could you prove the effectiveness or lack there of for offline media buys, like TV, radio and print? I don’t know about you but, it is kind of hard to do direct correlations between how much traffic and sales you get directly from a TV ad, but would love to hear your take.

Your Arguments are invalid!

This meme my friend James Zolman posted a while ago sums up how well I feel eBay did convincing big brands they shouldn’t bid on brand keywords. Well at least it would have come across about as well as their assertions in the study.

For a unique perspective on this, and possibly some of the alternative motives why eBay could have done this study read the post by Dennis or better known on Twitter @TheNextCorner

Do you feel eBay did a good job presenting why brands shouldn’t bid on brand keywords?

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