Extra! Extra! Read all about it! eBay Just proved that paid search ads are no longer effective! Ok so this isn’t actually as dramatic and groundbreaking as it may sound but it certainly is worth looking into. First let’s take a short trip to the past. During the 19th century, advertisement was considered a huge waste of money. Most people never paid much attention to newspaper ads or posters and billboards. The introduction of the internet was revolutionary because it allowed companies to target their customers more efficiently and presented a way for them to display only relevant ads to their customers. But now paid search may start to seem as ineffective as the ads of the olden days.
So according to this article, eBay’s research team conducted an experiment to see just how effective paid search is. They ran a controlled experiment where they shut down paid search for a third of the country. Turns out, they saw no noticeable difference between hits for parts of the country that still had paid search and the part of the country that didn’t.
Now before you start thinking “Whoa! Doesn’t that mean companies have been wasting millions of dollars on online ads this whole time?!” This isn’t necessarily the case. It’s just as the article said, if marketers didn’t find a strong correlation between paid search and sale revenue they would’ve never done it from the beginning. Paid search definitely helps for smaller companies that are trying to break into the market. However, if you look at it from the perspective of a larger company it makes sense that paid search isn’t as effective since natural listings would take the customer to their website regardless.
So what’s the point of all this? Well it’s still pretty crazy when you think about the ways this will change how online advertisement works. It means that advertisement trends are always changing and that following the same old mold as other companies might not be cutting it anymore. Rather than going with the mindset “Hey, our competitors are putting this much into paid search so we must also put in just as much if not more to stay competitive”. The research proved that this way of thinking is obsolete and all it’s doing is costing the company unnecessary costs and that companies have to go and figure out which strategy works best for them.
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