Checkout Party Costs Google in eBay Ads
A ploy to promote Google’s Checkout automated payment system has led auction Web site eBay to pull its Google search advertising, depriving Google of its largest single AdWords client.
The problem arose from Google’s plans to host a Checkout promotional event in Boston at the same time eBay was convening its annual eBay Live merchants’ conference in that city. Currently eBay does not permit merchants to offer Google Checkout on their eBay stores, allowing only the PayPal payment system, which it owns and which currently dominates the online payment industry. To add insult to injury, the title of the Google affair was “Let Freedom Ring”.
Google ultimately canceled the promotion a day before it was slated to occur. “After speaking with officials at eBay, we at Google agreed it was better for us not to feature this event during the eBay Live conference,” a post on the official Google Checkout blog said.
Nevertheless, early last week, eBay has pulled its pay-per-click advertising — estimated to have been worth $25 million last year — from Google’s search results pages. The company is characterizing the move as part of an ongoing “experiment” with its online ad channel mix.
Most analysts don’t expect the boycott will be permanent, simply by virtue of Google’s reach in search marketing. The engine dominates U.S. search with a current market share of more than 50%.
Bill Tancer, general manager for global research at online traffic measurement firm Hitwise, reported in his blog that click traffic both from Google to eBay and vice versa dropped about 7% between June 7, before the eBay ad pullout, and June 12. Tancer said the reason the dropoff was not more significant was that 25% of eBay searches coming from Google are not on pay-per-click ads but on brand, domain or navigational terms such as “ebay” or “ebay.com”.
