One of the more surprising aspects of the recent @eBay.com seller release was the revelation that they will no longer allow products ads on the marketplace that link to product sales on other websites. It’s a welcome move. It’s not known whether such a change will be coming to the UK site, but we do hope so. We wrote about it here. It’s long irked sellers that they are paying for product listings only to have eBay link to competitors.
In Q416 eBay made $313 million in ad revenue down 4% year on year.
But what will the new system look like? Some details are beginning to emerge and it looks like an ~Amazon Sponsored Products approach is on the cards.
Apparently eBay is building a new internal advertising sales and administration team and also cutting ties with the outside sales firms. The new arrangements with advertising options will help brands drive sales directly on eBay. It would seem that the offering will specifically appeal to bigger brands who want to drive their own online marketplace sales.
Bridget Davies, vice president and general manager for eBay Advertising North America says: “eBay always knew that we had massive scale, but advertising wasn’t our core focus. But it’s actually not an adjacent business; it’s a tool kit for brands and requires investing into it.”
There are several questions this news raises. Is it going to be an option that smaller sellers, SMEs and the like, can also plug into to drive sales and advertise their products? There does seem to be a focus on larger brands thus far. And also, what will it mean for selling fees?
Obviously on Amazon, the Sponsored Product Ads are on top of transactional charges. But if you consider, for instance, Chinese marketplace TaoBao which belongs to Alibaba, sellers don’t have fees at all and all revenues are derived from advertising and promotional top-ups.
It’s still early days and we’ll keep on monitoring what eBay have in store. What would you like to see?
2 Responses
Whilst this seems like a great idea on paper, it’s obvious where eBay will turn to to recover the income that they’ll lost from third party advertisers – their existing sellers.
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