eBay Advertising has soft-launched Local Services Ads, a brand new product designed to help local service organisations reach new customers and grow their businesses. It’s the platform’s first offer for service firms and is initially being piloted in the UK, with Germany also trialling it this month.
Businesses such as plumbers, hairdressers, DJs and cleaners will be able to use the platform to serve their own ads and offer their services to relevant eBay customers in their area.
This new product complements eBay’s existing offerings. Showing users ads for services that are relevant to the products they’re viewing will boost the customer experience by giving them easy access to services they’re likely to need, and in turn help to convert more sales for its sellers.
eBay has a problem and that is how to increase their revenues and there are only two ways to do this from their traditional marketplace fee model. One option is to increase sales on the marketplace generating more fees but eBay is already in the middle of a multi-year turnaround programme under the guidance of Devin Wenig, eBay CEO. This turnaround includes the gradual roll out of the new eBay Shop by Product experience as well as their Fill Your Cart With Colour consumer advertising. The only other option from the marketplace business is to increase the fee percentage that is levied on marketplace sales however eBay has already substantially increased fees in past years to a level where any further increases would potentially force sellers to raise selling prices having a negative effect on sales.
eBay Advertising is a way to increase revenues from the marketplace without impacting sellers but in the past this has often meant competing offers on eBay product pages or offers which are totally unrelated to the marketplace. The eBay Local Services launch is interesting as it potentially attracts a new set of advertisers to the site and at the same time gives the ability to display services which are complementary to the product on offer. Rather from distracting from the marketplace sale, eBay Local Services Ads could support the sale and be the convincer that a consumer needs to make the purchase.
“eBay wants to become a marketplace for services as well as products – and we think that this is a great place to start. Our Local Services Ads will particularly help small service-based businesses to use our inventory to target local, relevant customers. And crucially, we’re helping them reach users when they’re already in a buying mood, and when we know they’re in the market for a particular service, to deliver maximum ROI.”
– Rob Bassett, eBay Advertising
It is likely that many small business may end up accessing eBay Local Services Ads through larger agencies who will bulk buy exposure on their behalf. Whilst the program is accessible to small businesses, they may struggle to get to grips with the set up procedures. However eBay are offering incentives to get small businesses to go the DIY route.
Overall this is a win win situation for eBay. It enables them to increase revenues without pressure on merchants and at the same time breaks down barriers to purchase for consumers.