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Could this be the first proof that Google Ad Words are the emporers new clothes?

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For a long time I have believed that for many companies Google Ad words are a waste of money, this article in the New York Times has a great quote:
Last month, eBay temporarily stopped buying keyword advertising on Google, the Web’s largest search engine. EBay said the suspension did not have had significant effect on its bottom line. “We learned a great deal from that test,” Ms. Whitman said. “It actually had no impact on the financials of the quarter, and we learned a lot about where we want to spend money and where we think we can save money on Internet marketing.”

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Gravatar Image1 - Hmmm...

Ebay's brand strength is probably enough now that pretty much no one wonders "Gee, I wonder where I can pick up a used whatchamacallit?" and doesn't immediately type www.ebay.com

I mean, adWords make sense if you expect someone to perform a google search, but not know your own branding.

Gravatar Image2 - I agree with Nathan - I don't think eBay is a good test of the effectiveness of Google Ad Words, simply because there are many, many things that add to eBay's bottom line. A better test would be some very small brand with only a handful of places they're putting their name out.

Many businesses fail to measure their advertising's effectiveness. They shouldn't blindly assume that any advertising - Google Ad Words, newspapers, TV - will hit the mark. And what works for one business may not work for another due to audience, demographics, context, or even (obviously) the effectiveness of their pitch/promotion/advertising material (independent of where it is located).

Gravatar Image3 - My cousin, who heads a development shop that moves about 5% of the content to eBay, was in Boston for the eBay dev conference. Google, for some reason, tried to entice the eBay developers to a Google party. That started a heated exchange between eBay and Google - where eBay temporarily (note - temporarily) stopped advertising on Google. Google was flying signs outside of the eBay conference, etc...

Does eBay have enough brand equity to 'avoid' Google? Maybe? Will they continue to purchase adwords - yep.

Google adwords work and people consistently vote with their $.

When I perform a google search for 'Philips LCD 42', I have a feeling that I will eventually buy the TV from someone who has purchased the adword...otherwise, there is just too much noise in the system.

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