The 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.
We'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.
The 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.
i 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.
Is it actually confusing anyone? If I search for Pepsi and some of the ads are for Coke or Dr Pepper, that seems fine to me. If it's counterfeit Pepsi or something that's clearly a different case, but if someone searches "ebay mittens" I don't think it's ridiculous to allow a mitten store to have an ad that says "we sell mittens too!".
It definitely confuses our customers. We fairly regularly receive unpleasant tickets asking where their order is. Once we dig in we often find they did not order with us, but with a competitor who they thought was us.
The worse I've seen has been malicious malware spreading with an exact copy of the company site. There's also morally/legally dubious combative advertising eg: "Better than X" when searching for X.
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.
Not a chance. Google is trying to match search intent and so are ads. If the ads are relevant to what's being searched, then it receives a low quality score and isn't shown often, if at all depending on how irrelevant it is. If I am a lawn mowing company, I can't just show my ads whenever someone tries to lookup apple because they're a popular company.
So 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.
Yeah, 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."
Its 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.
To be fair to Google, they've only known about this issue for at least 10 years and I'm sure they are working hard on fixing it. It's not as easy as you think since the only legitimate domains in such a scenario would be .gov and there isn't any available technology to whitelist this tld - as far as I know?
When my household moved last year two of the adults fell for this scam with change of address. For the record USPS will change your address for free in person or for $1 online (using a credit card cuts down on fraud and they have to charge something to actually use the CC). Well two people fell for bullshit Google ads and paid $85 each. One got her money back. The other did not. I am sure Google will fix it any day now.
>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.
The 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.
That'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.
Except your storefront is on Google's land...and people find your website using their services...and you are free to not ever do any kind of ppc or seo work on your site at all.
It just so happens that Google's land includes all of the main streets where people shop. But, you are free to set up your store on a backstreet alleyway a few miles from the town centre. That way you won't have to pay the protection fee. That's some real freedom right there.
That's interesting, so google ads don't work yet simultaneously if you don't use them your business will just break down into nothing. How does that work?
Trademark 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.
That 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.
Apple 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.
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.
Thanks 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).
No 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.
This 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.
> 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?
You 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.
Well 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?)
I suggested you get literal direct experience from people who have used ads in their marketing mix. I gave you my direct experience. This is not an appeal to authority.
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?
I'm just trying to say to you - yes I also have direct experience with this, so don't try and give me some anecdotes. We ran meta-analyses across hundreds of clients / experiments using advertising, both retargeting customers who abandoned their baskets, and consulted on more traditional experiments as an independent auditor. These were mostly in the fashion and travel verticals. The revenue uplifts we saw as a whole across the sectors were poor, expecially compared to other things that these sites were doing (social proof, scarcity etc.) I never once saw a value like 6x ROI. We could not publish this publicly unfortunately, as it more generally showed that stuff people were A/B testing doesn't really do much, which would have been bad for business.
This does not mean that search advertising is useless as a concept. But the idea that it 'just works' is also clearly false.
So you entire argument is "I refuse to actualy engage with any of the presented facts and claims, big and rich institutions can't be wrong".
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?
My argument is based on having worked in performance based advertising for years and seen first hand that it works.
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.
I find some people will accept there are some situations where paid acquisition results in cannibalisation of acquisition they were going to get anyway. Conversely, there will be examples that prove paid acquisition is the best money you could ever spend.
Then there are people who dismiss everyone as not knowing what they are talking about.
Substack 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.
You'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.
What 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?
Where 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.
I'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.
It’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”.
> 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.
Businesses 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.
Maybe 'plumber' isn't the best example since any plumber currently generating business via paid search is probably the kind of plumber you would want to avoid?
I'm not so sure. They probably have a dispatch line and a scheduler that can get you on their calendar inside a few weeks. That would put them ahead of most plumbing businesses, IME.
For 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.
Suppose 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.
I'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!
Have 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.
This 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.
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 $50 in "sold fees". Talk about a double-whammy. I get if I got paid, that they get their cut. But this whole checking acct demand wasnt listed anywhere UNTIL the sales closed.
After this, I'm done with the ever-closing noose around buyers and sellers in the ebay ecosystem. I'm not going to get screwed. And after talking with others who do buying/selling, everyone's getting squeezed. Enough of that for me.
In my experience, the payment system is pretty reasonable. And I get the funds faster directly from eBay than going eBay -> PayPal -> bank.
PayPal would ultimately require your checking account information too, assuming that you want the funds to end up there. I'm not sure why eBay having that information poses any more of a problem than PayPal having it does.
And this payment delay is likely due to having to wait for credit card payments to process and settle. I don't think eBay is doing anything nefarious, here.
Lastly -- if you are concerned about banking info being disclosed, or eBay maybe messing something up and taking money, you could set up a separate checking account that you only use to hook up to online places like Coinbase, PayPal, Venmo, eBay, etc. that you use as a proxy to transfer into your "real" checking account.
In US that means routing number and account number. Having these two enables anybody to push or pull any amount of money (or at least try to pull, based on availability). Its crazy, companies promise that they will not pull more than asked, but sometimes coding error causes big problems, the one I remember etsy pulling thousands instead of 10s, because of a decimal point error, so pulling like 1486 instead of 14.86.
This information is on the bottom of every paper check. While it is probably not advisable to broadcast and post up everywhere, it is not supposed to be a secret.
Right, its security by deterrence. Besides its not like you can anonymously drain someones bank account, someone claims fraud on your 10,000$ charge you're getting a phone call from your bank.
True, yes, it will be sorted out if it is unauthorized, but if it is like in 1000 or around, most of the major banks will simply overdraft of active, and leave the customer to notice, find & call bank to sort it out. In real case of etsy, where etsy was pushing/paying money to sellers through direct deposit (& employers too), they mistakenly emptied accounts, and most of the accounts went into over draft, I believe a couple years ago.
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.
He probably means ACH access which can also be used for withdrawals instead of just deposits. Its not like writing and accepting a check or money order, which is generally only one-way. While there are some limits on this for "direct deposit" (can not withdraw more than was deposited, and there's a 5 day limit, so its functionally equivalent to bouncing a check but without the legal penalties), not all access to set to strictly "direct deposit". I don't know what eBay is doing but its possible to get authorization for both "direct deposits" and "withdrawals". ACH withdrawal is useful for things like Coinbase or PayPal where you want to pay electronically and trust is too low to risk credit card chargebacks.
They 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.
I can sympathize. I'd rather not fight that legal fight in the first place if I can avoid it. Plus I'm not a lawyer, and the Terms of Service are a thousand pages long. Am I entitled to small claims court or did I sign away that right and have to go to their arbitration firm? I'm not sure if the agreements I clicked through could say "I forfeit my right to any money and every dispute will be decided solely by eBay, Inc." and if it does I haven't read the thousands of pages of case law necessary to know in which situations that's invalid and I do still have some rights.
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].
I 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.
I get that there are external costs for providing things like cutting a check, or sending to paypal.
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.
The existence of a means of recourse doesn't undermine the point that they don't want eBay to have that power over their finances in the first place. Would you want your landlord to have unrestricted access (but for the law) to your finances? How about your neighbour?
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.
Google 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:
> 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.
> 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.
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)
> 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.
Your point is completely unclear. The vast majority of Google's money is coming from selling advertising. The have multiple ways of selling advertising - advertising on Google Search itself, advertising on other people's pages, advertising in YouTube videos etc. But it's ultimately all money from advertising.
They don't have to do paid placement. They know which sites are running their ads and can prioritize them to maximize impressions based on their pervasive tracking.
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.
I don't understand what you are getting at. In both your comments, it sounds like you find the most convoluted way to describe "Ads", and then claim that because you didn't use the word "Ad" in your comment, we should pretend that what you described is something completely different (but totally not ads?)
> Ads aren’t worth very much. Google ads generate [...] maybe fractions of a penny.
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.
> 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.
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.