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March 27, 2013

AdWords is Ineffective According to eBay. Google Contradicts

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ebay-logoLast week an article came out about eBay's opinion regarding Google AdWords. AdWords is Google's tool that allows companies to bid on keywords and advertise on search results. Thousands of E-Commerce websites use this tool to get people to click on their product pages, and eBay is one of them. However, eBay claims to have conducted its own internal research about the efficiency of AdWords and came back with following results: The firm stopped advertising branded (keywords that include the "eBay") and non-branded for a while to see if sales would be affected. They were almost not. eBay's conclusion is that SEM (AdWords campaigns) does not work for them, but is only efficient when the consumer does not know about a specific E-Commerce website and what it offers. SEM can be useful to inform consumers when a company has the product he or she is looking for. On the contrary, eBay is already a very well known company and one of the first websites on which users go when looking for a product online. Google responded to eBay's study and found that SEM does offer a major lift to advertisers and that organic ranking do not compensate when pausing advertising campaigns. All in all Google has proof that visitors have a higher chance to click through when a website has both organic results and paid results on the same result page. However, if the advertisers were to pause their AdWords campaigns, visitors would have less chances to click through, and sales would be impacted. Having both organic results and SEM campaigns for the same keywords greatly enhances the click-through rate. Another reason to eBay's dissatisfaction could be that the firm uses a lot of dynamic keywords for their campaigns, resulting in many unnatural phrases. Phrases like "Baby. Buy it Cheap on eBay. Low PRices, New and Used" have become extremely common and obviously don't encourage users to click-through.    
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