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eBay Ad business on benefits of eBay advertising

By Sasha Fedorenko May 3, 2019 - 12:30 pm

eBay advertising said today that their business shows no signs of slowing down after promising to create a next-generation advertising experience during last week’s earnings.

In 2017, eBay announced a shift in their advertising strategy. eBay moved from reliance solely on third-party advertisements to “a healthy mix” of first-party and third-party ads from complementary brands.

According to eMarketer, 2019 marks the first year digital ad spending in the US will exceed traditional. This means that marketing firms are moving their investments from search engines and social media to ecommerce platforms – viewing sellers as a channel to reach relevant customers with active purchasing intent.

‘Benefits’ of eBay advertising

eBay say that their data is different from many large publishers because they’re an ecommerce platform that captures buying intent signals, shopping insights and transaction-level data from 180 active buyers globally. This data enables sellers to optimise their ad campaigns to reach a more targeted audience.

eBay claims to be one of the few companies in the space that is well-positioned to be a strong partner to brands. Operating as a pure marketplace that connects buyers and sellers with no inventory of their own, eBay say that they have a unique opportunity to support merchants reach their target shoppers at every stage of their journey, on any channel and at any time. With eBay advertising, sellers can diversify sales by creating a new channel, go beyond sales attribution metrics, and form an open partnership to uncover new opportunities.

First-party ads

First-party ads, including promoted listings, give sellers and brands another way to attract more buyers to their items. This form of advertising drives more traffic to specific listings or special events chosen by the seller or brand, while keeping the buyer on the eBay platform. eBay’s promoted listings offering operates on a cost per sale model – meaning the seller only pays for the ad when it results in a sale.

eBay say promoted listings on average boost sellers’ listing visibility by 36%. More than 800,000 of eBay sellers today are promoting about 200 million listings. This has led to year-over-year (YoY) revenue growth of 110%.

eBay’s promoted listings announcement increased the eligibility for all sellers in ‘good standing‘ position to benefit from the advertising offering. Also, eBay’s new enhancements to the Seller Hub allows sellers to edit promoted listings more efficiently, resulting in more effective campaigns that drive awareness and sales velocity.

Third-party ads

Third-party ads are more of a traditional form of digital advertising, where brands advertise their services on eBay. These ads redirect the user away from eBay to the advertiser’s page and are particularly valuable to complementary brands – companies that offer services that cannot be sold on eBay such as insurance companies and banks. This offering allows complementary brands to utilise ecommerce shopper insights to reach target audiences on eBay’s platform.

This news highlight the growth of eBay’s advertising which some sellers claim are at their expense. Some merchants have voiced their concerns over the duality of eBay advertising. First, the rising cost of selling on eBay, coupled with advertising feels which are becoming a marketing necessity for trading successfully on the marketplace. Second, a proliferation of businesses that aren’t eligible to trade on eBay but redirect eBay shoppers to their own websites. However, what’s your view on eBay’s plan to expand their advertising business?

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