How can we know if paid search advertising works?

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).<p><i>Brand keyword bidding is simply a rent-seeking behavior.</i> 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.

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.<p>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.<p>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.

Substack prefetching my email address based on historical data is kind gross.<p>I appreciate the downvotes, but it is a clear dark pattern. Unless I have accepted their terms and didn&#x27;t read through them. It is the only site that does it, and they do it for everyone who is a Substack customer.

Where search advertising works well for me is &#x27;service&#x27; related advertising.<p>As an example I have a burst pipe and I need to call a plumber out to my house. 10 years ago I&#x27;d go to the physical phone book and look up a plumber to call. I don&#x27;t do that anymore now I type &quot;my suburb name + plumber&quot; into my browser.<p>Where it does not work well is because I searched for the term &#x27;plumber&#x27; every site I visit in my browser for the next few days will display ads for plumbing supplies. Or I&#x27;ll scroll through Facebook on another device (like my phone) and the plumbing ads will follow me there.<p>The first type of advertising is useful, the second type feels creepy and like the internet is stalking me.

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.

Unfortunately with the technical jargon compounded by numerous typos I utterly failed to comprehend what points this article was making.

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.<p>Sure you might have some opportunity cost, but this seems like a sensible strategy for a new company starting out.

my mother was scammed by a fake call center because she clicked a sponsored search result for &quot;paypal customer service phone number&quot;.<p>i never clicked the ads before, but i definitely don&#x27;t click them now... especially if they&#x27;re free to be used as an attack vector.

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 &quot;Subprime attention crisis&quot; that more broadly argues that the fact that programmatic advertising is based on similar mechanics as financial systems also means it&#x27;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.

eBay did me a whole different dirty:<p>I went to sell a few things 2mo ago. Sold them. And when the buyers paid, it went to an ebay escrow.<p>Only after I sold them, and money was sent, ebay DEMANDED unfettered access to my checking&#x2F;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 (!).<p>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.<p>All the sales fell through... And then ebay tried to lay on me $50 in &quot;sold fees&quot;. 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.<p>After this, I&#x27;m done with the ever-closing noose around buyers and sellers in the ebay ecosystem. I&#x27;m not going to get screwed. And after talking with others who do buying&#x2F;selling, everyone&#x27;s getting squeezed. Enough of that for me.

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.<p>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.<p>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.<p>EDIT<p>Death by a thousand paper cuts.<p>Somebody provided a source below, they clearly did not read, which explains all of this:<p><a href="https:&#x2F;&#x2F;www.cnbc.com&#x2F;2021&#x2F;05&#x2F;18&#x2F;how-does-google-make-money-advertising-business-breakdown-.html" rel="nofollow">https:&#x2F;&#x2F;www.cnbc.com&#x2F;2021&#x2F;05&#x2F;18&#x2F;how-does-google-make-money-a...</a><p>&gt; 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.<p>This section of the article further details how the auctions differ from online advertisement products.<p>I don&#x27;t have the source but Google&#x27;s chief economist has been very clear about how the micro auctions work and generate revenue separately from display ads.