If you search for eBay, though, you’ll find only a single listing—an unpaid one. Odds are, after marketers at Amazon, Walgreens, and elsewhere catch wind of a preliminary study released on Friday, their search listings will start to look a lot more like eBay’s.
The study—by eBay Research Labs economists Thomas Blake, Chris Nosko, and Steve Tadelis—analyzed eBay sales after shutting down purchases of search ads on Google and elsewhere, while maintaining a control set of regions where search ads continued unchanged.* Their findings suggest that many paid ads generate virtually no increase in sales, and even for ones that do, the sales benefits are far eclipsed by the cost of the ads themselves.