How eBay Is Challenging Traditional Advertising Models

By: Alex Linde, VP of Advertising and Monetization, eBay Marketplaces

Innovation and disruption go hand in hand. Stepping away from “default thinking” – the act of simply repurposing what others are doing – and focusing on the needs of customers is often the path to changing the game. With this in mind, eBay is launching a new service that challenges standard advertising models, and applies new levels of ROI rigor to guarantee the effectiveness of our advertising for our customers.

The new service, which we call promoted listings, will help sellers with an eBay Stores subscription increase their visibility and sales – and sellers will only pay when an item is purchased after a click on their promoted listing ad.

This new model – cost-per-sale – purposefully diverges from the more traditional cost-per-click ad model, and is one of the first examples of how eBay is developing new advertising models and products that allow our sellers – and us – to win in the commerce space.

A bold move in ‘commerce advertising’

eBay has traditionally been successful in the well-known ‘media advertising’ space: using our wealth of consumer data to help brands deliver their message effectively. The promoted listings service is part of a new set of solutions that will augment this existing advertising at eBay.

Called ‘commerce advertising,’ this new suite of services will drive sales by leveraging eBay’s deep understanding of how consumers shop our site to make better item recommendations to them, either because they are specifically searching for a product, or because a product is relevant to them based on other shopping behavior.

For instance, with the promoted listings service, sellers will use eBay’s  simple self-service tool to first select items they want to promote, then their ad rate – a percentage of the item’s final sales price that they are willing to pay for the added visibility that leads to a sale, and they’re done! Promoted listings that are relevant to buyer searches will then be shown in key placements in the search results page, ensuring relevancy for shoppers and a clear path to the items they’re looking for.

We’ve worked hard to make the tools straightforward, yet powerful, for sellers, and our team has been steadfast onreducing complexity to provide an easy to use user experience. I’m confident we’re setting a new benchmark for the industry.

The right thing to do

The Cost Per Sale (CPS) model developed for promoted listings holds eBay accountable for delivering the right traffic and placement to our sellers, and guarantees the effectiveness of our ads for shoppers. We believe this is the right thing to do for the tens of millions of businesses that list and sell on our platform.

Besides a seller’s selected ad rate, promoted listings will also factor in the popularity – or sell-through – of an item, as well as seller performance, among other things. This will help ensure that the most relevant items from sellers offering the best experiences are the most prominent for buyers.

This is just the beginning as eBay continues to build brands for the sellers on our site, and offers valuable new tools to drive traffic and help gain visibility for their businesses. We anticipate that the promoted listings  service will allow sellers, both big and small, to connect with buyers around the world in new ways.

How sellers can get involved

Beginning in June, promoted listings will be offered to a number of eBay Stores sellers in the U.S., UK, Germany and Australia, and will ramp to include additional sellers throughout 2015.

Interested U.S. sellers can visit this page for more information and to be added to a wait list.