EBay study questions value of Google's main ad service

I've had a completely different experience. I tend to buy "buy it now" items, particularly electronic items, regularly from ebay. I don't think in perhaps 7 or 8 years of regular ebay purchases (probably between 1 and 10 a month) I've had more than a few issues. Sometimes things get lost in the post (especially if the seller is based in China or Hong Kong), but they're often quite apologetic about it and often send another one if it never arrives.

It may be that in the past postage costs were hidden, but they've made it very clear now. The buyer pays the price + postage, both of which are clearly visible on the search page and repeated on the item and purchase page.

eBay is fantastic for small electronic components. If you need a couple of capacitors or a single (popular) chip, the price + postage is always considerably less than buying from a mainstream retailer (where £10+ postage for anything is the norm). My experience is in the UK, so elsewhere may be different.

I have run similar tests myself for a variety of clients.

Some end up with the same result as ebay; brand terms generate sales, but the incremental value of this is not worth the media spend.

For others, brand search advertising is a complete no brainer and they make a lot of money doing it.

The problem with this kind of analysis is that it's to short-sighted. The main benefit of advertising has never been direct conversions. Rather, the main benefit is keeping the brand in people's minds, so that they'll be more likely to come to you in the future.

When Coke buys a commercial slot on a TV network, do they expect someone to say "Holy crap, I need to drink a Coke right now!", turn off their TV, and drive to the grocery store? Of course not. They're playing a longer game than that.

This is also why the PPC model for internet advertising is totally broken.

I think there is more to "Google and Big Brands" story than what you have mentioned.

1. "Google has been pushing brands way up in search for 4-5 years now" - True, but it's important to note this is not a result of Google deciding "let's promote brands", it's a result of Google's algorithm improving. Google looks at query chains, sees that people hit certain sites after a few unsuccessful broad searches, and thus improves the broad search rankings of those sites. It is no coincidence that a significant portion of these "certain sites" happen to be big brands, which leads to point 2.

2. Brand advertising creates affinity - As Eric Schmidt put it: "Brand affinity is clearly hard wired." People end up at brand sites at the end of query chains because they recognize them, they trust them more, or they are just more familiar with them.

3. Google has lots of Brand advertising space - A quick review of the numbers of any Big Brand's SEM program will show some really abysmal inefficiencies and totally unnecessary bias towards branded searches (that's another problem altogether.) But the point is, Big Brands don't care if they could turn off Paid Search Ads in some areas and get the same ROI through other channels, they want to buy ads to signal they are a big brand, to saturate your vision with their brand and create the above mentioned affinity and familiarity.

Thus the cycle continues and Google has nothing to worry about with regards to big brands lowering Paid Search spend.

> Results show that brand-keyword ads have no short-term benefits, and that returns from all other keywords are a fraction of conventional estimates.

The article on reuters completely ignores the keyword 'short-term'. Furthermore, if eBay had an actually viable competitor it would be fighting for those ads with every penny.