Here's why, and why it's relevant:
I have a terrible experience on eBay.
The prices are great until the excessive shipping is added. Until payment I can generally get a response from the seller but after that it's like I don't exist. Then there are the outright scams.
And please note, I'm a _buyer_. I shudder to think that I should ever be a seller on eBay; sellers are left empty handed if a buyer claims "not as described." Example: http://www.cbsnews.com/8301-501465_162-57352136-501465/paypa...
When I try to shop for something online, even adding "-eBay" to a google search to drop eBay listings can be risky (it will eliminate any page that mentions eBay).
I believe this is relevant because the study is basically claiming eBay is well known enough that they don't need to advertise on Google. I'd argue exactly the opposite is happening: eBay is hemorrhaging users and a successful marketing campaign could change that. eBay needs Google more than Google needs eBay.
Amazon (mentioned in the article) and Apple are definitely innovative in the retail space. I notice they focus on targeted ads more than eBay does, because eBay's model is more hands off. And I think a direct consequence is Amazon and Apple can make good use of Google ads.
There's nothing wrong with "hands off" automation of big parts of your business. It works for Google.
But I can't really take eBay's study very seriously: if there are lots of customers and businesses who have grown tired of eBay (and PayPal), their advertising has got to be hurting.
Straighten out your house, eBay, and then people will want to stop by.
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.
If I want to deal with sketchy people to save a few bucks, Craigslist lets me do that with a higher chance of a positive outcome for $0.
Also, you can exclude ebay from search results by entering "-site:ebay.com"
I started with a longer paragraph there, talking about how annoying it is to go on google shopping, find a great price, then look to the right. Oh, eBay.
Then I edited down my wall of text.
That said, the whole "excessive shipping" thing is primarily used by unscrupulous sellers to skirt around ebay's fees. It also used to be used to appear higher in search results when sorted by price, until they started including shipping in that column. It's the reason you see a small widget like a laser pointer for a penny with 9.99 shipping.
You can report any listings like that and they'll get yanked for it.
And there's the little fact that the world's worst auction site and the world's worst payment provider are surgically joined at the hip..
It seems to me that eBay's most dangerous competition is etsy along with perhaps Amazon's "sellers."
You have etsy eating most of eBay's "we make it ourselves" market and you have Amazon which lets people buy "new" goods cheaper with less hassle than the eBay/PayPal mess.
You also have Craigslist going after eBay local...
The only niche eBay really has right now is cheap Chinese/HK direct imports and goods which are borderline legal (and Amazon would likely pull, like knives).
If someone steals that market form them then they might be in real trouble. Even my mom who is in her 50s uses Amazon to sell used books instead of eBay - easier she says.
My other problem with eBay is that in some categories the pricing is just wholly unrealistic. Specifically used/vintage cameras - the initial and ending prices on these items on eBay is often much higher than what the same cameras are trading for on enthusiast forums. The demographic of people collecting these on enthusiast forums vs. those buying the same items on eBay is clearly different.
Without hyperbole, I'd rather set up shop on a blanket on the sidewalk than do business with eBay.
Anyway, the worst part is that eBay collected the listing fees before the auction was handed over to the fraud dept. I got my fees refunded, but in the form of credit. So now every month, for the past 10 years or so, I get a e-mail from eBay reminding me of my current account balance of -$26 and change.
In the same vein, google search ads probably have low value for facebook too.
(preliminary paper published and presented at the March 8 NBER "Economics of Digitization" Conference)
As a side note, you know an article (reuters) is dumbed-down linkbait when they don't even bother linking to the actual study they are referencing.
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.
Consumers go through stages until they finally adopt your product (if they ever do). In the beginning, they have never heard of you, so they certainly can't become customers. Then, they gain some basic awareness that you exist. Once they gain some basic awareness, some may choose to learn more about you. And, after they gain more knowledge, some people will choose to make a trial purchase. Finally, if your product/service is good (and the experience is good), some consumers will choose to adopt your service - they will become long term customers (and a good source of word of mouth)...
I'd argue that PPC is great for awareness, knowledge and even (maybe) convincing people to make a trial purchase. But after that, the company itself has to provide a good service. Further, it's rather obvious that once the marketplace knows that you exist and knows a bit about you, you won't gain as much from this type of advertising...
Search advertising has been very lucrative for a lot of people, this was especially true when there were few contested keywords and the cost to land on a page was low by comparison.
However, if you look at Google's results over time, they grew spectacularly as they added advertisers and their price per placement was growing. Then the growth of advertisers slowed because there are only so many of them in the world, and in their latest results you can see that the price per click has stabilized (and declined slightly) as well. Both of those point to a maturing of the search advertising market.
My guess, and it's only a guess, is that Google's revenue from search ads has peaked. (Peak Ads anyone :-)) and going forward the dynamics of that market will be a lot more subtle. More complex advertising packages will be created that increase the total number of pages where ads are shown but do so in a way that spreads cost around (like discounting a front page add if enough "page 3" ads are bought at the top of that page).
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.
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.
Both of these, if used properly, can make insane amounts of money for a company. And, if used improperly, they are little more than a money sink.
Another thing is the price, it has skyrocketed lately. What may have made sense at $0.40 a click, no longer does at $2 a click.
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.
