Google AdWords (PPC) Is a Waste of Money?

Published by Ben | Filed under PPC, Search Industry

A recent Google advertising boycott by eBay, as covered by the New York Post, stirred up some interesting discussion around the office.

For those who aren’t familiar with the tiff - basically, eBay yanked its ads from Google’s U.S. site after the two clashed over a marketing event to promote Google Checkout, a rival online payment service to ebay’s Paypal.

Anyway, the point is that eBay ended up boycotting Google by not spending money on search ads, and shifted money to Yahoo, MSN and AOL. The result? eBay saw traffic to it’s site rise. At first glance, the moral of the story appears to be that Google is a waste of money… But we think there’s a lot more to it:

• The Yahoo buy: eBay shifted money to a Yahoo homepage buy… Yahoo is still THE most heavily trafficked site on the Internet. Have you priced a homepage banner buy on Yahoo lately? It ain’t cheap and most marketers wouldn’t consider this as a reasonable spend
• Buzz: There was a ton of publicity around the eBay vs Google tiff and the boycott resulting in traffic to the site
• Google buys can be psychological: We go over this with clients all the time. Depending on your target market and campaign goals, sometimes Google isn’t the best use of your PPC dollars. In many cases - we’ll see a Yahoo campaign turn out far better results and we can even prove it with analytics. However, some less disciplined marketers can’t get around the fact that they use Google, and their ego dictates that they must have a presence on Google. You are not your target customer!
• PPC isn’t always all about clicks: This point may seem counter-intuitive to my previous statement, but there is a lot of recent research that shows the branding power of PPC ads. eBay also knows this. And while Yahoo gets more traffic, more searches are performed on Google. I’d be surprised if eBay continued to boycott Google, but they will absolutely scrutinize budget allocation to make sure dollars align closely with campaign goals.

Ultimately, we believe that your PPC budget allocation should match your campaign goals, and we work with clients to think long & hard about strategy and target markets. If we’re targeting IT / engineers - then Google may absolutely be the best place to spend dollars. But if we’re targeting women over 35 - Yahoo may turn out to be the better spend. The nice part about PPC is that it’s easy to test, measure & evaluate. At that point, budget allocation decisions can be made based on performance - which is the mark of a good campaign strategy.

When asked if Google is a waste of money - I always reply “I don’t know - let’s find out by testing”