Experimentation and paid search

The next time you do a web search take an extra moment to see how the paid results compare to the top organic results. Sometimes the top link is the same for both.

This article, from the authors of The Power of Experiments, drives it home with this excerpt:

“Evidently, users who Googled ‘eBay’ (or another eBay-related search term), who had been clicking on the ad because they saw no reason to scroll down to the organic link just below it, were now instead clicking on the first organic search result. For these searchers, eBay essentially swapped in free organic clicks for each advertising click lost,” explain Luca and Bazerman. “In other words, much of the money eBay was shelling out to Google each year was a waste.” After the results of these experiments were published, 11 percent of large companies that were buying search ads in the same way as eBay discontinued that advertising.

It reminds me of that classic quote: "Half my marketing spend is wasted...I just don't know which half."

More importantly, it illustrates the need to continuously monitor and analyze data, all the while maintaining a strong culture of curious experimentation.

I wonder how much of Google's income is derived from advertisers who never bother asking if their high organic ranking might perform just was well as the results they're paying for...