Google or Bing? Ad Wars Heat Up
Source: http://searchengineland.com/ebay-dumps-google-syndicated-ads-bing-ads-mobile-devices-208143
It appears that Google is no longer completely dominant when it comes to serving ads. It recently came to light that EBay has dropped Google AdWords for it’s text ads that appear at the bottom of it’s mobile pages. It has instead elected to use BingAds. This may seem strange because Google is the industry leader in advertising and Bing has a comparably smaller market share. It seems that this shift stems from a penalty Google slapped on EBay for “spamming” search results and causing the quality of results around it to decrease. This penalty has reportedly cost EBay over $200 million due to the lack of search exposure. As a result, EBay has decided to shift to BingAds. The move isn’t total though. Only mobile ads are being served by Bing, Google is still serving EBay’s ads on other platforms. Here’s the kicker though, Bing ads are notorious for having a much smaller click through rate (CTR) than Google ads.
It seems that EBay values the loss in CTR higher than the loss resulting from the Google penalty. This is related to how advertisers and customers make decisions on advertising slots and companies. Matching markets or VCG procedures can be used to predict how advertising slots will be allocated. There are two sides to this article. The first is that Google, the advertiser must have seen EBay’s actions as more a harm than the value they gain from providing ads for EBay. Thus they decided a penalty to EBay may cause them to stop their practices and return Google’s value from their business to a favorable one (for Google). The other side is that EBay obviously saw a value from BingAds that was not only greater than the cost of stopping certain “dishonest” (according to Google) practices but from continuing to use Google AdWords. Therefore their best option was to switch to a new advertising provider. Who knows how this will continue to unfold as it appears Google’s advertising market share is declining.