6 Critical PPC Lessons from eBay's Biggest AdWords Mistakes

By Larry Kim

Paid Search

There’s much to be learned from the successes of the “big guys” in PPC – those brands that spend hundreds of thousands or even millions in paid search ads – but even more from their mistakes.

Man, has eBay made their share of mistakes… and then some.

You see, eBay wasn’t very happy with their Google AdWords performance, so they wrote a report on how terrible PPC ads are and decided to boycott the channel. AdWords is a complete waste of money, they said.

Yet even a cursory look at their AdWords ads and strategy pointed to several mistakes that could easily have been corrected.

If you don’t want to end up with a PPC strategy like eBay’s (see: none at all), learn from these six critical mistakes.

1. Relying On A Single Source Of Traffic Is Dangerous

EBay didn’t need paid search, they said, because their organic rankings were strong. Unfortunately, some SEO issues on their site resulted in a huge organic traffic loss as a result of Google’s Panda 4.0 algorithm update.

Putting all your eggs in one basket is dangerous in any business, but especially in ecommerce. You need diverse traffic sources to withstand fluctuation in any one channel.

Lesson: Organic and PPC aren’t competitive, but work best together.

2. Dynamic Keyword Insertion Isn’t An Autopilot Feature For PPC

EBay’s ads were a source of online hilarity for many years, thanks to their DKI insertion nightmares. Dynamic Keyword Insertion (DKI) is a feature that injects specific keywords into ads to match user searches. It’s a pretty useful feature when used properly, but it isn’t meant to be autopilot for your AdWords account.

EBay’s misuse of DKI resulted in terribly mismatched ads, where the inserted keyword made no sense in the context of the ad as a whole, like this:

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Some weren’t just silly, but offensive, like DKI ads for slaves and wives.

Lesson: Use Dynamic Keyword Insertion only where it makes sense… and monitor it!

3. Broad, Irrelevant Ads Kill Your ROI

Of course eBay wasn’t happy with their AdWords performance and return; they were blanketing the web with crap ads that often had nothing to do with the user’s query.

A query for the word “love,” for example, triggered an ad from eBay:

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People looking for love obviously don’t want to buy it on eBay! You don’t want people clicking on ads like this.

Irrelevant ads have a far greater cost than unwanted clicks. People tend not to click on ads that don’t answer their question.

The way AdWords works is that advertisers with the best ads – those with high relevance and good click-through rates – get a click discount. Meanwhile, low relevance, low performing ads pay more per click.

That’s right, bad ads cost more.

Lesson: Boost your ROI by improving relevance and optimizing ads for relevant clicks.

4. Don’t Try One Approach And Throw Your Hands In The Air

eBay’s “research” on AdWords was really just anecdotal since they weren’t even employing best practices. Yes, they had a large sample size of AdWords activity to analyze, but it was pretty silly to publish a report slamming AdWords when they hadn’t even put the bare minimum of effort into their account.

It should have been an internal document meant to help them improve their own strategy, rather than a report damning the platform. Instead of trying to learn and adjust, eBay decided AdWords just sucked. They took their toys and went home.

Lesson: PPC is all about testing, optimizing, and testing again. Invest the time in learning what works for your brand.

5. Size Doesn’t Matter As Much As You Think

Until two years ago, eBay was the second largest ecommerce ad spender in AdWords. Deciding that their accounts were too huge and complex to manage properly was a copout.

Big businesses like eBay do tend to have incredibly complex accounts, but they also have more resources to manage them. AdWords accounts require regular upkeep, regardless of size, by dedicated PPC managers.

Lesson: In our studies on the top performing ads in the AdWords system, account size wasn’t a determining factor in ad performance.

6. Really Get To Know AdWords – Ignorance Is No Excuse

EBay’s report showed that they didn’t understand how many AdWords features work. For example, they decided that ads shown to their returning site visitors had a lesser return than those shown to new visitors. Therefore, they decided, those ads were a waste of money.

Except, you can exclude certain audiences in your paid search campaigns.

Often, the solutions for the issues you’re experiencing in AdWords are already there – you just have to find and use them. EBay really had no excuse for not learning about these options at some point.

Lesson: Study and understand all the AdWords features available to you.

PPC Strategy And The Value of Elbow Grease

It really comes down to effort. Advertisers can achieve unicorn results if they put the legwork into it. It’s a massive industry that’s still seeing double-digit growth each year and the opportunity to connect with and nurture leads is great.

Automate where you can – to save time and more easily spot opportunities – and get your best practices in check, then commit to ongoing optimization. Anyone can do this – even eBay.

Larry Kim

Founder & CTO, WordStream

Larry Kim
Larry Kim is the Founder and CTO of WordStream, Inc., a provider of PPC management software and services.

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