"The reality is those people are already intending to go to your Web site," said Young-Bean Song, vp of analytics for Atlas, formerly part of aQuantive and now a unit of Microsoft. "What you're really paying for is a glorified Yellow Pages listing."Also noted was that when eBay stopped advertising with Google for 10 days this June, their traffic was "not noticeably impacted."
This conclusion should come as no surprise, particularly to those of you who follow Toad's Tirades. If you think about how you interact with search ads, it's fairly obvious you're using them to find what you're looking for. So if I put "Volvo" into Google, intended to visit the car maker's site, it's sometimes easier to click on the search ad that comes up on top than to go to the list of link Google creates.
Not to say search ads are a complete waste. They're great for small companies in niche businesses where there are no well-known players. So if I'm looking for bird houses, and you're an investment banker who quit it all to open a small carpentry studio in Vermont, a search ad that links to Barry's Organic Bird Houses will definitely yield some results.