Some search engines have built its business on the back of persuading business owners to buy keywords – such as their company name or a term such as “insurance” and other terms to get a link to their website high up on search engines.
What else did this important study reveal?
The study also shows that brand keyword ads [where companies purchase ads on searches for their own name] have no short-term benefits, and that returns from all other keywords are a fraction of conventional estimates.
The report also found that most customers would have clicked through to a particular site without being prompted by an ad for the company. In the absence of paid search links consumers simply substitute to organic search links, the results Google’s search algorithm brings back without companies having to pay for which proves that brand keyword advertising has neither persuasive nor informative value to well-known corporations.
More secrets revealed
Also the report found that “new and infrequent” users are influenced by ads. However it is “existing loyal users” who already know all about a service and would already go to the website account for most of the clicks on paid-for keywords which indicates companies are wasting their money targeting ads at their very existing customers.
Advertising may appear like it is successfully attracting these consumers, when in reality they would have found other channels to the firm’s website organically.
So its not hard to calculate that the short-term returns on investment for search engine marketing were negative because more frequent eBay shoppers are accountable for most of paid search sales. In carrying out the study eBay removed paid-search keywords using its brand name from Yahoo and Microsoft search engines and kept paying to keep them on Google search.
Anymore unknown things?
The Report also show that almost all of the forgone click traffic and attributed sales were immediately captured by natural search, Removal of these advertisements simply raised the prominence of the eBay natural search results.
They also conducted a separate test of the effectiveness of non-branded keywords – such as “cell phone” – and found “search engine marketing had a very small and statistically insignificant effect on sales what so ever!
The company said its findings were likely to be equally relevant for other major brands, and raised questions about the received wisdom that such advertising is an efficient way to market to consumers.
“The efficiency of search engine marketing is that weak, a conclusion that is likely to apply to other large brands that together spend billions of dollars a year on internet marketing,” the report concluded”.
Any response to that?
Studies by Google based on results from thousands of advertisers, have found that more than 88% of search ad clicks were incremental and that 50% of the search ad clicks were incremental even when there was an organic search result for the advertiser in the top position. Since outcomes differ so much among advertisers and are influenced by many different factors.
We encourage advertisers to experiment with their own campaigns. Tools are provided such as AdWords campaign experiments and content experiments and recommend a statistical method for advertisers to conduct their own geo-targeted experiments as efficient as possible. Said one company spokesman.
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