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How can we know if paid search advertising works?
- vgeek 5y agoThe article fails to mention that shortly after this made the rounds in the marketing communities, eBay suddenly got a very large SEO penalty. Conspiracy theories aside, I once inherited a large Adwords account with nearly 25% of spend dedicated to branded KW bidding. Simply dialing back bids by 90%+ dropped impression share from 95% to 80%, but the paid branded clicks just shifted to organic branded clicks-- confirmed by lining up Google Webmaster Tools click level data (since Google stopped providing organic keyword data in GA 10 years ago). Brand keyword bidding is simply a rent-seeking behavior. Sure, it can help with new entrants trying to grow their visibility (albeit likely ineffectively) as an alternative to an incumbent with more brand recognition, but the majority of brands are simply paying protection money to keep their own site, that users are explicitly seeking, above the fold on search results.
- paulpauper 5y agoI believe spending money on ads is the only way to get any sort of favoritism from a major tech company, and also being a famous/important person
- JustARandomGuy 5y ago>that shortly after this made the rounds in the marketing communities I'd love to read more about this. Do you have any recommended "marketing communities" that I should visit?
- vgeek 5y agohttps://searchengineland.com/google-ebay-penalty-cost-197031 https://searchengineland.com/google-ebay-penalty-cost-197031 This relates to the ebay penalty. I think one of SEland's founders actually left to take a job at Google as an evangelist. You can probably search for "ebay seo penalty" and find more references. Other notable penalties that were well documented include RapGenius and GV backed Thumbtack and Nest, which quickly had their penalties reversed if I recall correctly. https://seobook.com/blog https://seobook.com/blog is the only place I follow any more, since it is more critical of the digital marketing ecosystem. There are so many snake oil salespeople and clueless marketers, so this is a refreshing commentary. https://seroundtable.com https://seroundtable.com is good for rumors and breaking news. https://www.seobythesea.com/ https://www.seobythesea.com/ a more technical blog that frequently examines Google's patents.
- JustARandomGuy 5y agoVery kind of you. Thanks.
- marc_io 5y agoThanks for the links, but regarding seobook.com/blog: it is quite strange to see a blog about SEO without HTTPS, which is a ranking signal since 2014 (1). (1) https://developers.google.com/search/blog/2014/08/https-as-ranking-signal https://developers.google.com/search/blog/2014/08/https-as-r...
- stavros 5y agoNot only without HTTPS, but actively stripping it, too!
- vgeek 5y agoNo idea why he doesn't have https enabled, but he probably knows it is disabled and explicitly wants it that way. He has covered plenty of technical SEO topics, but is more of a commentary on the industry now. I'd probably filter out the politics, but a good majority of the marketing/advertising content is spot on.
- ocdtrekkie 5y agoYeah, once you realize the most profitable Google search terms are already the top organic result paying to be on top, you realize Google's business is the guy who shakes down storefronts for "protection" to avoid their windows being broken in by the local gang on a global scale. "That's a nice brand you built there. Ya know, it'd be a shame, a real shame, if one of your competitors was to end up above you on the search results page. I could, uh, make sure that doesn't happen."
- charcircuit 5y ago>Yeah, once you realize the most profitable Google search terms are already the top organic result paying to be on top What if you aren't the top organic search and you want to drive traffic. For example "mesothelioma lawyer" is a very profitable keyword that'd you would want to show up on top. If there weren't any ads you would need to out SEO other law firms and hope Google doesn't screw you by adjusting the ranking algorithm.
- ocdtrekkie 5y agoThat's the obvious legitimate purpose of selling the ad space. If that's where Google's money was coming from, I wouldn't be irritated. Well that and if they didn't profit on the malware/support scam ads. However, I suspect if we were to remove Google's revenue from those two categories, they would not be in the Fortune 50.
- tempestn 5y agoThe problem is specifically with branded searches. When someone searches not "mesothelioma lawyer", but rather, "Kirkland & Ellis LLP.", and they get an ad for some other law firm above that.
- ClumsyPilot 5y agoIts worse: you search for a government service, like issuing a passport or a driving lisence, that by law and by logic only the government can provide , and the top result is often a scam.
- tempestn 5y agoWe've found exactly the same thing. It's extremely important to differentiate between branded and non-branded keywords. (And to be diligent about filtering out all variations, misspellings, etc., of branded searches from non-branded campaigns.) While our testing didn't show 100% waste in branded advertising, we did find approximately 80-90% of branded clicks would otherwise have come through organically. So we do still do a small amount of branded search advertising, but with an assumed actual CPC of 10x the nominal CPC (and therefore quite a low maximum bid). For non-branded ads, we assume the true CPC is much closer to the apparent one.
- misterbwong 5y agoThe branded keyword game is very sneaky, though, and one place where google can (and does) make a killing. The trick is, if you have a particularly strong or unique brand, you can count on being the number one organic result. HOWEVER, if competitors bid on your brand and you do not, they end up above your brand in results as part of the the paid/promoted position. This usually forces brands into competing in paid positions on branded keywords that they should "win" naturally. Google rationalizes this by charging more relevant results a lower rate, but it still doesn't excuse the fact that the brand shouldn't have had to pay in the first place.
- tempestn 5y agoSo far we haven't found the presence of ads above our organic result seems to make a big difference, but I expect that could vary a lot based on the brand and what competitors are advertising. Probably a good idea for anyone planning to spend significant ad dollars to test for themselves.
- chii 5y agoi wonder if competitors bidding on your brand should be construed as trade mark violations - after all, if a user searches a brand and a competitor's site or product is shown as part of advertising, then aren't they making use of your brand to confuse the consumer (a classic trade mark violation)? The only problem is that the user isn't "seeing" the brand and confusing it, but instead is searching the brand and the search result is confusing deliberately.
- cwkoss 5y agoIt's a protection racket that allows others to use your trademark to sell their product if you don't outbid them.
- camhart 5y agoI don't think you can use a trademark in ad text. But companies still try to wiggle around this.
- cwkoss 5y agoBut you can use a trademark as an ad targeting term... which feels a little trademark-violation-y to me.
- cwkoss 5y agohttps://veritasbusinesslaw.com/trademark-and-google-adwords/ https://veritasbusinesslaw.com/trademark-and-google-adwords/ Looks like several companies have tried to sue Google for this, but Google threw a lot of money at the problems to prevent them from winning.
- nradov 5y agoTrademark litigation can be expensive, but you can't win every trademark case just by throwing more money at the problem. If there was a legitimate IP violation then someone would have won a case against Google by now.
- cwkoss 5y agoI think that's a very reductive take. The idea that I can buy placement in searches for a competitor is not clearly a "legitimate IP violation" but I think it's also not clearly "not a legitimate IP violation". Is it good for society that I can redirect users who intend to be looking for a competitors' products? Its a complex subject that I'm not sure the courts have examined the repercussions of properly. The counterfeit and deception arguments in some of the suits certainly seem like they have some merit to me.
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- somedude895 5y ago> the majority of brands are simply paying protection money Exactly this. Google should be forced to not allow bidding on other companies‘ brand kw.
- toto444 5y agoThat would mean you can just buy 'hotelsincornwall.com' and no one will be allowed to bid for 'hotels in corwnwall'. You are now facing a different problem.
- withinboredom 5y agoI don’t think you’d get a trademark for that name…
- toto444 5y agoWhy not? 'Apple' is a trademark right?
- withinboredom 5y agoApple is a distinct name in that industry. You can call yourself Apple and sell toddler toys without violating any trademark. You can’t call yourself “X in Y city” because it’s not distinct in that industry unless you literally are the only unique one in that city.
- dotancohen 5y agoShould Basecamp and Trello not be allowed to advertise on searches for "Jira alternatives"?
- austincheney 5y agoGoogle does make money from ads, but that is not their primary business. Yes they have AdWords and they bought DoubleClick around 2007. They also have YouTube that took them forever to figure out how to monetize. They bought Urchin (Google Analytics) specifically to monetize AdWords. Google’s primary business is search. They monetize search in a couple different ways. The primary revenue model for search is micro auctions to determine ranking of product placement on search results. I don’t have numbers but I suspect Google ads get far more eyeballs than do their search results. The distinction though is margin not quantity. Ads aren’t worth very much. Google ads generate a higher margin than Facebook ads but still tiny, like maybe fractions of a penny. When I was at Travelocity a million years ago I remember hotels bidding up to $18 per click for placement on searches related to Las Vegas. Not only is that click-through worth a fortune it is also relevant and thus far more likely to be clicked. EDIT Death by a thousand paper cuts. Somebody provided a source below, they clearly did not read, which explains all of this: https://www.cnbc.com/2021/05/18/how-does-google-make-money-advertising-business-breakdown-.html https://www.cnbc.com/2021/05/18/how-does-google-make-money-a... > Search is Google’s most lucrative unit. In 2020, the company generated $104 billion in “search and other” revenues, making up 71% of Google’s ad revenue and 57% of Alphabet’s total revenue. This section of the article further details how the auctions differ from online advertisement products. I don't have the source but Google's chief economist has been very clear about how the micro auctions work and generate revenue separately from display ads.
- yjftsjthsd-h 5y agohttps://www.investopedia.com/articles/markets/030416/googles-6-most-profitable-lines-business-googl.asp https://www.investopedia.com/articles/markets/030416/googles... and https://www.cnbc.com/2021/05/18/how-does-google-make-money-advertising-business-breakdown-.html https://www.cnbc.com/2021/05/18/how-does-google-make-money-a... (first results I could find) both say 80% of Alphabet’s revenue comes from Google ads; unless you have numbers to say otherwise, I think it's pretty reasonable to call that their primary business
- austincheney 5y ago> Search is Google’s most lucrative unit. In 2020, the company generated $104 billion in “search and other” revenues, making up 71% of Google’s ad revenue and 57% of Alphabet’s total revenue. From your second source. I guess you were conflating ad revenue to online advertisements. Its all ad revenue, but its not all online advertisements.
- noasaservice 5y agoeBay did me a whole different dirty: I went to sell a few things 2mo ago. Sold them. And when the buyers paid, it went to an ebay escrow. Only after I sold them, and money was sent, ebay DEMANDED unfettered access to my checking/savings account. They would not cut a check, pay to paypal, or any other method. One of their managers said the only way I could get my money was to wait 1-3 years and would send the money to federal unclaimed money (!). Obviously, I never sent them. I could never get the money. I messaged to all the buyers that I could not fulfill any sales BECAUSE ebay refused to send me my money in an appropriate manner. All the sales fell through... And then ebay tried to lay on me $50 in "sold fees". Talk about a double-whammy. I get if I got paid, that they get their cut. But this whole checking acct demand wasnt listed anywhere UNTIL the sales closed. After this, I'm done with the ever-closing noose around buyers and sellers in the ebay ecosystem. I'm not going to get screwed. And after talking with others who do buying/selling, everyone's getting squeezed. Enough of that for me.
- hollasch 5y agoCan you explain what you mean by "unfettered access"?
- BizarroLand 5y agoThey were uncomfortable giving ebay the ability to wire their money into their checking account out of fear that ebay would then later take money directly from their bank account, not even considering that if ebay did anything fraudulent their banks and the federal government (assuming they are American) would have their backs in reclaiming the money.
- Zircom 5y agoI think you're being incredibly dismissive and a little condescending for no reason about his concerns, I'm sure they "considered" that while yes there is legal recourse if eBay were to take money out they weren't supposed to, the process isn't a 100% guarantee by any means, and you're still out that money while it's being investigated/resolved. Not everyone is in the privileged position of being able to float a couple thousand dollars while an issue like this is being resolved.
- skilled 5y agoSubstack prefetching my email address based on historical data is kind gross. I appreciate the downvotes, but it is a clear dark pattern. Unless I have accepted their terms and didn't read through them. It is the only site that does it, and they do it for everyone who is a Substack customer.
- ZephyrBlu 5y agoYou're complaining about them pre-filling your email when you have an account? How is it a dark pattern? It's convenient. It's not like they're automatically signing you up to the publication.
- skilled 5y agoWhat account? I do not have a Substack account. I might have subscribed to someone in the past who is a Substack customer. Does that give them the right to automatically fetch my email address for all of their other customers, too? It's creepy.
- tomcam 5y agoCould it be your browser is filling it in?
- ghostly_s 5y agoUnfortunately with the technical jargon compounded by numerous typos I utterly failed to comprehend what points this article was making.
- VHRanger 5y agoFWIW this is a blog aimed at statisticians and economists, so intermediate undergraduate statistics is more or less assumed in the authors language
- gaucheries 5y agomy mother was scammed by a fake call center because she clicked a sponsored search result for "paypal customer service phone number". i never clicked the ads before, but i definitely don't click them now... especially if they're free to be used as an attack vector.
- ALittleLight 5y agoI've made a similar mistake before. Google "X customer support phone" and dial the number that turns up on the top of the page. Luckily for me I could instantly tell something was wrong and so I avoided getting scammed - but still, Google ads are dangerous!
- bigger_cheese 5y agoWhere search advertising works well for me is 'service' related advertising. As an example I have a burst pipe and I need to call a plumber out to my house. 10 years ago I'd go to the physical phone book and look up a plumber to call. I don't do that anymore now I type "my suburb name + plumber" into my browser. Where it does not work well is because I searched for the term 'plumber' every site I visit in my browser for the next few days will display ads for plumbing supplies. Or I'll scroll through Facebook on another device (like my phone) and the plumbing ads will follow me there. The first type of advertising is useful, the second type feels creepy and like the internet is stalking me.
- contravariant 5y agoI'm not sure the first type of advertising is that useful. Why would I care which plumber paid Google the most money? I just want to find plumbers. I suppose you could make a 'search' engine by just letting people pay to show up on whatever keyword, but I'm not sure if that serves the same purpose as a general web search engine.
- Spooky23 5y agoIt’s a sort of social proof. If you want a larger company to reduce risk, you can probably correlate placement with revenue. In the Yellow pages, display ads were the same thing. If you don’t know of them before hand, you might assume that the half page display ad was a more “legit” company than “AAAAA-1 Plumbers”.
- passivate 5y ago> Why would I care which plumber paid Google the most money? I just want to find plumbers. Yes, exactly! Also, To your second point, its in Google's interests that customers have no other way except paid ads to look you up. IMHO, Google has become a company that wants to install toll booths on the internet.
- bigger_cheese 5y agoBusinesses have to pay to advertise in phone directory already so I don't think this is much different and as other commenter suggested presence of a paid ad suggests service provider may be more reputable.
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- morelandjs 5y agoSuppose you could buy ads that are active every other week. I feel like after a few months you could compare the active and non-active weeks (perhaps excluding holidays) and have a pretty good sense what you are getting for the ad spend. Sure you might have some opportunity cost, but this seems like a sensible strategy for a new company starting out.
- kbos87 5y agoThis article tackles one small and specific portion (bidding on branded keywords) of what paid search advertising is all about, so I think it’s fair to say that the title overstates the scope of the content. Paid search advertising has been subject to hit pieces for the past 15 years, often authored by people who are resentful of Google for some reason and happy to cite a bunch of statistics that don’t actually prove their point. Are there inept advertisers burning money on AdWords? Of course. Does that mean that major brands with entire departments filled with analysts running their paid search efforts can be debunked in a couple thousand words? Obviously not.
- sweezyjeezy 5y ago> Does that mean that major brands with entire departments filled with analysts running their paid search efforts can be debunked in a couple thousand words The old "all the successful companies are doing it, so it must be doing something" argument. Even within companies, incentives are skewed - do you really think a CMO would ever say, “maybe online ads don’t work, I don't need so many staff reporting to me anymore, take them away". The onus is on the people claiming that it does something to prove it - I want direct, explicit evidence - where do I find it?
- RubyRidgeRandy 5y agoYou can talk to pretty much any ecommerce site or ppc specialist - open up linkedin and message away. I had clients triple their yearly revenue with well implemented ad campaigns. Do you really think these things are implemented without any kind of tracking in place? We have people who only run ads with a targeted ROAS of 10x. That's not something you can do or track effectively with a magazine, billboard, or radio ad. There's a reason online search advertising makes Google so much money, because it's damn effective.
- sweezyjeezy 5y agoWell that's pretty far from what I asked for, more appealing to authority and unpublished internal analyses (presumably run by marketing departments). I used to work for an ecommerce A/B testing company, and have seen first hand how untrue it can be. Google doesn't make money because it's damn effective, they make money because people believe it. There is published research that that show that it doesn't work as well as Google or internal marketing teams want people to believe it does (did you read the article, or just count how many words it was?)
- yen223 5y agoFor the folks who are jumping straight into the comment section to post your spicy takes on Google ads, the more interesting part of this article is in the second half, where it talks at length on being able to tease out actual causal inference, which I think is worth a read.
- dado3212 5y agoDitto, was surprised at all the comments being about ads when the ads bit seemed more a reason to talk about causality.
- vikeri 5y agoThis is a sub theme in the book "Subprime attention crisis" that more broadly argues that the fact that programmatic advertising is based on similar mechanics as financial systems also means it's vulnerable to bubbles in the same way. Interesting read but I would have loved some more data on the actual efficacy of programmatic advertising.
- Terry_Roll 5y agoHave advertised on adwords in the past, never got any sales, just burned through money so dont use it any more. Done fax mailshots, postal mailshots, all at various expense, not one sale. Had one sale from Yellow Pages but that also caused its own problems, so dont bother now.