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By Thomas Baekdal - July 2013

How To Do Paid Search Wrong (and Right)

The AdContrarian is a great site run by the always funny Bob Hoffman. I often agree with his posts about the hype of digital, but sometimes he takes it a bit too far.

In his latest post, we can read about an Ebay study that found that the ROI of paid-search advertising produced zero result.


The eBay study called Consumer Heterogeneity and Paid Search Effectiveness: A Large Scale Field Experiment (no, I'm not kidding) concluded...

According to the study...

eBay historically managed over 170 million keywords and keyword combinations using algorithms that are updated daily and automatically feed into Google's, Microsoft's and Yahoo!'s search platforms.

Presumably, eBay commissioned the study to figure out how much of their search money was being wasting. Their conclusion seems to be: all of it.


To which Bob adds:

Which I think means something like this... Google is full of shit.

Well... not so fast.

I have no doubt that Google makes a ton of money from clueless companies like Ebay, who are spending a hideous amount of money on search advertising in a completely wrong way. And not just eBay, but probably most companies.

It's staggering how often we see brands completely miss the boat, by targeting their messages to the wrong crowd.

This is not just true with Google Search, but also on other channels. For instance, last month I noticed a brand running a sponsored post on Facebook, asking people who had already liked their page (their fans) to like their page. That's like a movie theater running the trailer for the movie you are about to see after you have already bought the ticket.

And this is exactly what Ebay was doing. If you read the report, you will find this: "eBay conducted a test to study the returns of brand keyword advertising (all queries that included the term eBay, including multi-word terms such as 'ebay shoes')"

But why would you advertise on the keyword "ebay shoes" when you are already listed at the top? That's like throwing money out the window.

We see the result quite clearly in this graph:

When Ebay stopped buying search ads, the organic traffic made up for the loss. In other words, instead of clicking on the ad, they just clicked on the Ebay link at the top of the search result pointing them to the same place.

And, of course, when you study this, you are going to find that your search advertising produce zero result. It doesn't matter if there is a search ad there or not, people still found Ebay at the top of the page.

Same with other forms of search advertising where people are just adding words that have no relation to search. Remember, unlike ads on websites, search is a result of a specific intent, so random exposure has no meaning. If I search for tomatoes and you show me a search ad for cardboard boxes, I'm not going to click on it.

Ebay was doing this at a rate of "170 million keywords and keyword combinations using algorithms that are updated daily and automatically feed into Google's, Microsoft's and Yahoo!'s search platforms."

That is a phenomenal amount of money wasted on faulty search advertising.

So, Google is not full of shit... but Ebay certainly was. This is not how to do search advertising.

How to do it right

There is nothing wrong with search advertising if you do it right. This means you have to pay attention to two things:

  1. What is the intent of people doing the search?
  2. Can you give them a better answer? ...or a better alternative?

For instance, if people search for 'shoes' they might see this:

In this case, it would make a lot of sense for Ebay to pay for a search listing because they are not even on the list. The keyword "ebay shoes" is useless, but the keyword "shoes" is not.

Using search advertising when you don't show up in organic search can be very useful. This is especially true for younger companies who have yet to reach the size needed to always be at the top.

For instance, if you search for 'baekdal' you will always find me at the top, but it wasn't always like that. It took years for me to reach that point. When you are small and unknown, search advertising is a quick way to skip ahead.

Another example is to be very specific, like when you are launching a new product. Imagine that your old product "Rachel Tents" is being replaced by your new product "Sophia Tents". Then it would be highly relevant to use search advertising to point people to the new product when they search for the old.

Note: Concept page. Not a real search result.

Remember, it's all about intent and making the results better. People intended to buy the Rachel tent, but you are helping them by telling that there is now a new improved model.

Another example is one that I just love from an old presentation called "Re-think Mobile Marketing & Analytics" by +Avinash Kaushik. Here we see a person searching for 'locksmith' on a mobile device. What you find is not just a locksmith, but a locksmith tied to your location, with their phone number as the call-to-action.

This is a great way to use search advertising. It ties directly into the intent of why people are likely to search, and it's targeted not just in terms of content but also in terms of the action that people want to make.

It's brilliant!

These are just three simple examples of how to do search advertising right. Don't do what Ebay did. Don't think of search advertising as just another channel of exposure. That's not what its good for.

Think of search advertising as a channel of intent.


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Thomas Baekdal

Founder, media analyst, author, and publisher. Follow on Twitter

"Thomas Baekdal is one of Scandinavia's most sought-after experts in the digitization of media companies. He has made ​​himself known for his analysis of how digitization has changed the way we consume media."
Swedish business magazine, Resumé


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