Is Google AdWords truly effective? Recently, there’s been buzz about a study claiming eBay essentially wasn’t able to make paid search work for them due to their dissatisfaction with AdWords. Ray Fisman, the study’s author for Harvard Business Review, stated, “Their research indicates that numerous paid ads yield practically zero sales increase, and even for those that do, the sales gains are dwarfed by the ad costs.” This news made me chuckle, as I’m sure it did many of you. It’s no secret within the well-known within the search engine marketing community that eBay is often the subject of ridicule when it comes to adopting effective advertising strategies. eBay is arguably the biggest offender of a questionable AdWords tactic called Dynamic Keyword Insertion, or DKI. True to its name, DKI automatically inserts the user’s search query into the ad headline, like so:

Used strategically, DKI can be a powerful ad writing tool. However, eBay’s implementation has been disastrous.

Dynamic Keyword Insertion Gone Wrong

eBay’s AdWords approach seems to involve targeting every word imaginable with Dynamic Keyword Insertion. For the past decade, they’ve been running ads on completely nonsensical terms, including things that don’t exist or are illegal to sell. Here are a few examples: Need a Perpetual Motion Machine? Shop on eBay and Save! Discount Perpetual Motion Machines!

Feeling lonely? Need a wife?

Looking for love in all the wrong places, perhaps?

And how about some slaves or Bill Gates while we’re at it? I could go on, but it’s safe to say anyone using Google in the last 10 years has seen their fair share of nonsensical eBay ads. So, I’m not surprised they’ve finally realized their lack of AdWords ROI.

It’s Not AdWords, It’s You: The Flaw in eBay’s Ad Strategy

eBay’s scattergun ad strategy is inherently flawed. AdWords allows companies to select specific keywords to trigger their ads. To encourage advertisers to choose relevant keywords (which benefits Google by minimizing irrelevant and annoying ads), the platform offers discounts for ads with high click-through rates. Conversely, they penalize ineffective ads (like those for slaves or loneliness) by charging up to 10 times more. Moreover, eBay’s bizarre ads likely result in low conversion rates, as users clicking through are unlikely to find what they were (perpetual motion machines, anyone?) and won’t make a purchase. This means eBay was paying a premium for mostly useless clicks. These factors likely contribute to the study’s findings. I’m sure Google appreciated your business, but your misguided ad spending yielded little return.

Attention John Donahoe: Fire Your Ad Managers and Let Me Have a Go!

eBay, it’s not AdWords that’s failing you – it’s your ineffective ads. Successful paid search is achievable, but it requires more effort than creating a generic ad template and shoehorning every imaginable keyword into it using dynamic keyword insertion. I’ve worked in paid search for a decade, helping thousands of businesses succeed, and I’m confident I can do the same for you. Here are five free tips to get you started:

• Be more selective with keywords. Instead of broad terms like “baby,” target specific intent like “baby bottles” or “baby stroller.”
• Explore Dynamic Search Ads – a new Google feature that automatically selects keywords for you.
• Utilize negative keywords to prevent your ads from appearing in irrelevant searches, potentially saving millions!
• Employ remarketing to target users who abandon their shopping carts – a highly effective way to recapture lost sales.
• Get a free AdWords account audit. Consider the first 5 tips a gesture of goodwill. John Donahoe, your AdWords account managers are a liability, and your account is a mess. Call me, and I’ll turn your Google PPC around. Find me on Twitter: Follow @larrykim