Study Downplays Effectiveness of Paid Search Advertising
Bank of America.
Santander Consumer USA.
Capital One Auto Finance.
Westlake Financial.
Do a search on www.google.com for “auto loans,” and those are just some of the very recognizable names that pop up in the paid search results running down the right side of the page. The image at right is what showed up this morning when I did a search for “auto loans” on Google. Companies have paid Google billions of dollars to have their names appear alongside organic search results for specific terms. Auto lenders are paying up to $27 per click to show up in the paid results when someone searches for “auto loans.” But is that money being wasted?
It is, according to a study released in the U.K. The researchers worked with eBay Inc. in examining the effectiveness of paid search results on traffic and revenue.
The researchers looked at Internet users who searched for brand-specific terms, like “eBay shoes” as well as non-brand specific terms, like “cell phones.” In both cases, there was little to no uptick in traffic from the paid search results. As well, non-brand-specific ads, like “cell phones” (or “auto loans”) did little to drive traffic to eBay’s site.
Now, this might be an instance where “your mileage might vary,” and the dynamic of users searching for “auto loans” is different than people looking for cell phones or used guitars. But, at the very least, the study should give pause to anyone and everyone using paid search as a means of promoting themselves or trying to attract new business.
The researchers pointed out that these results applied to any company that has an established brand and presence, like eBay. Companies that lack that kind of name recognition could stand to benefit more from paid search than those household names. From the study:
The results of our study show that for a well-known brand like eBay, the efficacy of [search-engine marketing] is limited at best. For the most part, paid-search expenditures are concentrated on consumers who would shop on eBay regardless of whether they were shown paid search ads.
Companies spent nearly $40 billion advertising alongside search results on Google in 2011, according to the company.
Bank of America.
Santander Consumer USA.
Capital One Auto Finance.
Westlake Financial.
Do a search on www.google.com for “auto loans,” and those are just some of the very recognizable names that pop up in the paid search results running down the right side of the page. The image at right is what showed up this morning when I did a search for “auto loans” on Google. Companies have paid Google billions of dollars to have their names appear alongside organic search results for specific terms. Auto lenders are paying up to $27 per click to show up in the paid results when someone searches for “auto loans.” But is that money being wasted?
It is, according to a study released in the U.K. The researchers worked with eBay Inc. in examining the effectiveness of paid search results on traffic and revenue.
The researchers looked at Internet users who searched for brand-specific terms, like “eBay shoes” as well as non-brand specific terms, like “cell phones.” In both cases, there was little to no uptick in traffic from the paid search results. As well, non-brand-specific ads, like “cell phones” (or “auto loans”) did little to drive traffic to eBay’s site.
Now, this might be an instance where “your mileage might vary,” and the dynamic of users searching for “auto loans” is different than people looking for cell phones or used guitars. But, at the very least, the study should give pause to anyone and everyone using paid search as a means of promoting themselves or trying to attract new business.
The researchers pointed out that these results applied to any company that has an established brand and presence, like eBay. Companies that lack that kind of name recognition could stand to benefit more from paid search than those household names. From the study:
The results of our study show that for a well-known brand like eBay, the efficacy of [search-engine marketing] is limited at best. For the most part, paid-search expenditures are concentrated on consumers who would shop on eBay regardless of whether they were shown paid search ads.
Companies spent nearly $40 billion advertising alongside search results on Google in 2011, according to the company.
