Around 90 per cent of search advertising spend is with Google, but the 25-page report said the advertisements had little effect.
The eBay report, titled Consumer Heterogeneity and Paid Search Effectiveness: A Large Scale Field Experiment, said: “Results show that brand keyword ads [where companies purchase ads on searches for their own name] have no short-term benefits, and that returns from all other keywords are a fraction of conventional estimates.
It continued: “[In the absence of paid search links] consumers simply substitute to organic search links [the results Google's search algorithm brings back without companies having to pay].”
“This implies that brand keyword advertising has neither persuasive nor informative value to well-known corporations,” it added.
eBay’s study included removing paid-search keywords using its brand name from Yahoo and Microsoft search engines, but left them on Google.
The auction site also coducted tests of effectiveness for non-branded keywords such as “cell phone” and found “search engine marketing had a very small and statistically insignificant effect on sales”.
A Google spokesperson told the Guardian: “Google's own studies, based on results from hundreds of advertisers, have found that more than 89 per cent of search ad clicks were incremental and that 50 per cent of the search ad clicks were incremental even when there was an organic search result for the advertiser in the top position.
“Since outcomes differ so much among advertisers and are influenced by many different factors, we encourage advertisers to experiment with their own campaigns.”