eBay’s Paid Search Study Alternatives Motives for Publishing Ineffectiveness

I couldn't hide from all the chatter around the white paper about eBay's paid search campaigns today. All kinds of people with little knowledge on internal optimization within eBay are jumping on this story to give their perspective. The overall message they are so loudly shouting into the world is how bad eBay really is in PPC advertising, trying to win a little bit more authority on the subject themselves in the hope to win new clients.

I won't go into the details of the article, as I've never worked on eBay's paid search campaigns. Reading the research white paper eBay published is interesting though, and I know that some of it holds up, other parts not so much.

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Skeptical on the eBay Report

I'm somewhat skeptical on the actual outcomes of the research in the eBay report.

First of all, every site is different. So what would work for eBay, might not work for anybody else!

Second, you could use Paid Search campaigns in so many other ways, cross channel objectives, which has not been taken into account in this study.

Third, although the study looks at conversion to sales ratio's of the campaigns, the real ROI is hardly discussed.

Fourth,You should look at the fully loaded ROI to understand the complete impact on eBay's eco-system. This does not only incorporates the eBay fees, but should also include the Paypal fees when an item is being paid through Paypal and advertising revenue. And with Paypal penetration rates at a high double number, and advertising on almost every pageview, the campaigns ROI is highly influenced by multiple revenue streams.

Fifth, if the research holds true, can somebody explain me what happened end of Q3, beginning of Q4 last year, where SEO traffic for eBay tanked, and suddenly Paid grew out of the normal trend:

eBay SEO visibility tanking end of Oct 2012

Where Paid Search Campaigns for eBay are ramping up immediately

These graphs are made with Searchmetrics

Sixth; conducting a test on non-branded keywords, like Cell-Phone might be giving interesting outcomes, if you keep the way Google looks at sites from a SEO perspective into account. Keyword Cell-Phone is a head term for electronics, where eBay is not represented well in SEO. From the human rater documents which leaked from Google, there might be more obvious reasons why eBay is not ranking well:

How to rate eBay landing pages?

Alternative Motives for eBay to Publish Paid Search effectiveness Study

What most people commenting fail to take notice off, what are the real motives of eBay to publish such research? You really think a large, for profit company would make their direct competition smarter just to get some feathers stuck somewhere..? Below here I describe possible motives for eBay to publish this paper. These are all hypothetical, and not based on what really happened as I don;t have the internal information what has happened. Read these more as thin foil hypothesis for my enjoyment, and for you to think further than just the optimization of Paid Search campaigns.

Large Companies F*** each other over

eBay has had a long history of working with Google on a Frenemies status of their relationship. eBay gets a tremendous amount of traffic through SEO, and have worked with Google on several fronts to make the Internet a better place. However, there are well documented instances which shows the underlying relationship, which is one of stiff competition.

  • Google Dark; Back in 007, eBay shut down all Paid Search at Google to run a test. The black out period gave some interesting insights in the effectiveness of Paid Search at Google.
  • eBay sued Google over the launch of Google Wallet and trade secrets

For obvious reasons, I can hardly go into too much detail here, but imagine the drop in eBay spend over 2012, while Google is ramping up their efforts in the payments industry AND making Google Shopping pay-for-play, after killing off the shopping comparison vertical completely!

Internal Politics Kill Real optimization

In a company like eBay, there is a power struggle at the top on a continuous basis. The one with the bigger budgets control their own destiny, and can become very successful empire builders. With a change in C-suit players, the power struggle can become more aggressive, where studies to proof ineffectiveness of campaigns could destroy the power base of the existing rulers.

You've got Lies, Damn Lies and Statistics...

It has happened that one group proofed with analytic proof, that the advertising on eBay was cannibalizing the  conversion rate of items on the site, and had an impact on site speed. 4 months later, the VP of the group moved to the business side, became responsible for the P&L, and with 3 weeks into the quarter and a $20 million hole in the budget, made the executive decision to move the ads back on the site. Just make a check on the eBay site, it's full with ads right now, even on the View Item page which had always been a sacred page for sellers!

This Paid Search campaign effectiveness study could very well be a power play from inside groups to take control of the advertising budgets. Objective: proofing incompetence to replace and take control

False Information for Competitors

What happens to the overall marketplace if the research is adopted by more large advertisers? Right, less demand for the impressions out there will bring CPC's down in the marketplace.

By spreading this information, under the umbrella of statistical research, could very well have an effect on the ROI of existing eBay campaigns.

Be Careful What You Wish For

So when I read an article like this, where the writer is challenging the CEO of eBay to give him a chance to proof what he could do for eBay with Paid Search, I cannot help myself to think: "Be careful what you wish for" as the truth of the matter might not be as cookie cutter clear as you think, and you might find yourself in a situation you are not set up to succeed in the first place, even if you are the best Paid Search consultant in the world, there might be forces out there which want you to fail at it! (furthermore I don't think the writer did himself a service to build his arguments on 6 year old screenshots...)

The people who have managed the eBay paid search campaigns are good friends of mine, which is why I won't go deep into the criticism if the campaigns have been working for eBay or not, just to stay objective here. What I can say, is that the majority of the people commenting on the quality of the creatives, the supposedly fail to optimize these campaigns on a ROI positive manner, might not be so right at all. They probably have never managed a budget of the size of the eBay Paid Search budget, while optimizing for 170 million keywords, while landing the budget within 1% of the amount, each and every quarter and showing incremental ROI improvements time and time again. The teams who manage these campaigns are very smart and creative in doing new tests, which you can hardly judge upon as an outsider!

Disclaimer: I worked for eBay for 9.5 years in different positions, last 6 years of my tenure focused on Global SEO for all eBay sites cross the world. I cannot disclose all information I have, and do not claim to be an expert in Paid Search! These view do not represent the views of my current employer, nor eBay's!