The Impact That eBay, Amazon Have On Search Marketing
Trends at South by Southwest (SXSW) identify how search will meld, not dissolve into the background. It will become a technology that exists in all online marketing and advertising, and the supporting platform for all mobile apps and Web sites. You can see it in research released this week from eBay and UC Berkeley.
New and infrequent users of the online auction and marketplace are positively influenced by paid-search ads, but the purchase behavior of existing loyal users is not -- resulting in negative returns on average, according to the findings. While the findings don't mention product listing ads, the results seem to point marketers toward images rather than text ads.
This makes sense, considering that eBay led the research. The company conducted a series of large experiments designed to detect the effectiveness of paid-search advertising. The results show that brand-keyword ads have no short-term benefits for companies on the online auction and marketplace, and returns from all other keywords return a fraction of estimates.
Although the study uses outdated financial information for search engine marketing (SEM) estimates, the findings clearly indicate that more consumers are using mobile apps to bypass search engines and go directly to the source -- especially for loyal and long-term customers. "A decrease in the use of the search platform without a corresponding drop in sales suggests a more complex relationship between paid traffic origination and user purchase behavior," according to the report. "A natural hypothesis may again be the sheer name recognition of eBay."
So should search provide the branding platform? Apps and sites like ShopIttoMe.com -- which searches and aggregates items from multiple sources to serve up in a daily email update -- have clearly become the disruption between engine and brand, as consumers search for goods through alternative ways.
The eBay research lays out the formula to interpret the implications for business decisions, computing implied return on investments (ROIs) associated with spending on paid search. The researchers explain how they derive at the ROI from the estimates and impact on revenue.
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