Billion-dollar search advertising investment down the drain?
An eBay study has claimed that adverts in search engines have "no measurable benefits" to advertisers, as customers don't differentiate between natural search results and paid ads.
eBay published the findings in its research paper titled, 'Consumer Heterogeneity and Paid Search Effectiveness: A Large Scale Field Experiment,' which was prepared in collaboration with researchers from Berkeley and Chicago universities.
According to the report, "almost all of the forgone click traffic and attributed sales were captured by natural search."
While ads in search engines do attract clicks, consumers would have clicked on the natural search result anyways, calling into question the efficacy of multi-billion dollar search advertising market.
To test this, eBay shut down advertising for its brand-related items on Yahoo! And MSN, which led to a significant surge in natural clicks.
But the study also says that unless a site pays there is no guarantee it will show up on the front page. Advertisers buying space on search results for generic (non-branded) results can take comfort from this fact.
To test this, the researchers in collaboration with eBay, stopped advertising entirely on non-branded search terms to 30% of the US for a period of 60 days. The results found that it had "a very small and statistically insignificant effect on sales... on average, US consumers do not shop more on eBay when they are exposed to paid search ads," reports The Guardian.