How can we know if paid search advertising works?(causalinf.substack.com) |
How can we know if paid search advertising works?(causalinf.substack.com) |
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.
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.
"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."
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.
Exactly this. Google should be forced to not allow bidding on other companies‘ brand kw.
I'd love to read more about this. Do you have any recommended "marketing communities" that I should visit?
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 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 is good for rumors and breaking news.
https://www.seobythesea.com/ a more technical blog that frequently examines Google's patents.
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.
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.
It's creepy.
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.
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.
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”.
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.
I agree it's a bad metric if you have a better option, but in this example you don't.
Sure you might have some opportunity cost, but this seems like a sensible strategy for a new company starting out.
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.
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.
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-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.
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?
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.
The author could have presented a cure for cancer and you woild have dismissed him just the same.
Before 2008 banks were handing multiple mortgages to strippers.
Does that mean that major banks with entire departments filled with analysts running their risk analysis and loans efforts can be debunked in a couple thousand words?
Anyone who has direct experience in the space has seen the never ending stream of the same pedestrian arguments from people who have no idea what they are talking about.
For most organizations with a professionalized paid acquisition team, the returns aren’t fuzzy or something that a CMO could justify if it wasn’t producing real returns. The campaigns I worked on drove millions of dollars in incremental revenue every month. Turn it off, the revenue stops. Not some obscure attribution question.
PayPal would ultimately require your checking account information too, assuming that you want the funds to end up there. I'm not sure why eBay having that information poses any more of a problem than PayPal having it does.
And this payment delay is likely due to having to wait for credit card payments to process and settle. I don't think eBay is doing anything nefarious, here.
Lastly -- if you are concerned about banking info being disclosed, or eBay maybe messing something up and taking money, you could set up a separate checking account that you only use to hook up to online places like Coinbase, PayPal, Venmo, eBay, etc. that you use as a proxy to transfer into your "real" checking account.
You're going to have to explain how product placement in search isn't ads.
I worked at Yahoo! Travel in the before times, so hello from a fellow Travel industry person, I've got a Travelocity gnome in my stuff from work area. :) We had lots of advertising on our pages too, but it was always clearly marked (for some value of clearly); Yahoo! had done some pay for search ranking deals long before I joined, but they were clearly frowned upon by the time I was there; organic results had to be organic, although certainly if an advertiser is pushing a hotel that's going to get traffic which could boost rankings (I don't think Y! Travel included traffic in hotel rankings, but we didn't have a super thorough data pipeline)
From your second source. I guess you were conflating ad revenue to online advertisements. Its all ad revenue, but its not all online advertisements.
Google monetizes search with ads. The micro auctions are for those ads. They even say "Ad" on each of them.
If you have evidence that they're doing paid placement in the actual search results, I'd love to see it.
FWIW, I do wish Google's ads were more obviously visually distinct from search results (and fewer in number).
Google monetizes search but not with Google ads. This is the primary distinguisher. Its an auction selling space on page for a supplier to provide their own textual content. Google's online advertisement businesses don't sell space on Google pages, but online ad products for other peoples' pages.
Google considers all of this as ad revenue, but distinguishes search from their advertisement products in their revenue filings.
Per their 10K, ads are >80% of their revenue.
I'm sorry, carry on.
Suppose someone types "hotel Paris" into a search engine. Then the ads auction is the search engine turning around and saying "here's someone that's (probably) about to spend a thousand euros on _some_ website. How much if I send them to yours?" You can't buy that kind of intent-to-buy for only pennies -- that's 2-3 orders of magnitude off.
There's definitely ads that are sold by the kilo-impressions, but search ads generally do not fall in that category.
Disclosure: I work for Google, but have no relevant inside information. A public resource for this is https://brandastic.com/blog/how-much-do-google-ads-cost/:
> In 2022, the average Google AdWords cost per click is about $1 to $2 on the Google Search network. Some newer niches may still see lower costs, while more established businesses, might see higher cost-per-click averages.
However, I suspect if we were to remove Google's revenue from those two categories, they would not be in the Fortune 50.
(1) https://developers.google.com/search/blog/2014/08/https-as-r...
Then there are people who dismiss everyone as not knowing what they are talking about.
Google Search ads are bucketed under "Google Search & other" in financial statements, which is just one of their "Avertising revenue" categories as defined here: https://abc.xyz/investor/other/additional-financial-informat...
So... an ad.
"A rose by any other name" and such.
Are you referring to the things that say "Ad" next to them on Google's search result pages? If so... those are ads.
This is an ad.
You then immediately appeal to authority by your own definition by bringing up your experience. Working in an A/B testing company is a lot different than doing A/B testing. I create and implement digital marketing strategies for companies. We do A/B testing as well. So when a client is making over 6x return on their ad spend, how is that 'not working' when the baseline has already been well established?
This does not mean that search advertising is useless as a concept. But the idea that it 'just works' is also clearly false.
I'd rather just not play ball. Especially given that eBay harassed people who inconvenienced their business with bloody pig masks, live cockroaches, and death threats against the spouse[0].
0: https://arstechnica.com/tech-policy/2020/06/ebay-execs-sent-...
If that's the case, then let me agree to paying 1% or so to send via another method. I'm only asking for that option.
I don't allow any organization to reach into my bank accounts using an ACH. Simply put - I work in IT, and know that these systems have errors, and the errors are almost always in their favor. And I'm on the hook for a whole bunch of sadness waiting for them to "finish their investigation 8 weeks from now".
However, the biggest problem isn't that they demand this, but they demanded this *after* I had 5 sales go through.
By means of analogy: the utility of Android's fine-grain app permissions system is not rendered obsolete by data-protection laws.
It's especially galling as eBay could, presumably, just offer to wire the money over after enough time had passed that the buyer can't complain that the item didn't arrive as described. (This would cut out PayPal and card-transaction fees, which is presumably the whole point.) They choose not to offer this.
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.
Most of the employers', companies' direct deposit forms/agreements say they can pull money back they paid by mistake.
In contrast in India, now banks ask cheque holders to login into net banking and submit the cheque info if they write a cheque over certain big amount. One leaf of cheque allows only one withdrawal, when presented in original, and if signature matches exactly, and if account has sufficient money; whereas in US, routinely companies convert paper cheque to electronic payments.
Best part of course is that Google has been constantly making it less clear whether something is an ad, so the tricking is really primarily done by Google themselves. The advertising is really just paying to be the first search result.
> Google has been sued frequently for trademark infringement because it allows advertisers to purchase trademarked names for use in AdWords by competitors.
> Google has never lost one of these cases.
> Google derives 97% of its revenue from advertising, annual revenue that was over $109 billion as of 2017.
> These conflicts illustrate a serious problem with how internet advertising is conducted.
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.
Perhaps they settled every single case. Show us one that went to trial.