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Google Paid Search: is it effective?

Jul12

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Over the years we have never bought any advertising for the company, instead focusing our marketing efforts on PR and partnerships that can help spread the word of our work. Recently, I have been dabbling in the world of paid search. See we have this brand new Web 2.0 application for baby names and given that baby names is one of the most searched items on web and we have probably the biggest database with 25,000 names, I thought this would be something with which to experiment. Truthfully, the jury is still out (I will let you know when I have concluded examining this program). But, it has made me very keen on this topic of late.
You guys probably already know that Google makes BIG money through paid search. You know when you type in “stroller”? The first couple of links are “sponsored links” purchased by big retailers of strollers in America, followed by www.stollers.com in the natural search. Heck, people are even buying Alpha Mom.
Are these paid searches effective and worthwhile or are companies throwing away their money?
There’s a recent audit that says that for many companies and categories, no, it’s not effective. (I link to the press article because the audit is only available as a research report that you need to buy).
Until recently eBay accounted for 4.1% of Google’s paid search. In a spat with Google, eBay pulled, last month, all paid search dollars and moved it to Yahoo! and other sites. Do you think this hurt eBay? Nope, they saw little drop-off in traffic. Moreover, the day that eBay launched a web banner on the Yahoo! homepage was its biggest sales day last month. Yikes for Google.
Also interestingly, the audit claims that companies pay more attention to paid search than to how their companies fare in natural search. The Wall Street Journal, MSNBC, BusinessWeek, the New York Times and Forbes spend advertising dollars on paid search when they already dominate the natural results for their publications. Apparently Google’s own research shows surfers look toward natural search results over paid ones by a ratio of 4-to-1.
So, why are they doing this? As an insurance policy against competitors? See Forbes has been buying the term Fortune, as in its competitor’s namesake.
I can see why a non-household-name retailer or a small- or medium- sized brand name company would benefit from paid search. But a company like Amazon or Target? Not so much.
If want I a book, I go to Amazon or Barnes & Noble as a first stop. I want to buy a household item, Target is one of, if not my first stop anyway. And, it’s probably listed at the top of any natural search anyway given its overall traffic level.
These brands, much like eBay, are so well recognized it would not be surprising if paid search doesn’t work for them. Unless, they are launching a certain promotion or going into a business line for which consumers are not yet fully aware.

About the author

Isabel Kallman

http://www.alphamom.com
Isabel Kallman is the founding mom of Alphamom.com.

Feel free to send nice emails to isabel[at]alphamom[dot]com.


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One Response to “Google Paid Search: is it effective?”

  1. Beth B. Jul 13 at 12:20 am Reply Reply

    thanks so much for posting about google searches. I was really curious about the ROI. And you baby naming app sounds so cool, what a great idea!

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