eBay’s ad business is showing no signs of slowing down after reporting steady growth during last week’s earnings. In 2017, eBay announced a shift in its advertising strategy, from a reliance solely on third-party advertisements to a healthy mix of first-party and third-party ads from complementary brands.
And the timing couldn’t be better. According to eMarketer*, 2019 marks the first year digital ad spending in the U.S. will exceed traditional. At the same time, marketers are beginning to shift ad dollars from search engines and social networks to ecommerce platforms, viewing online retailers as a promising new channel to reach relevant and attractive consumers with active purchasing intent**.
Let’s take a look at what’s behind the progress and the road ahead.
What are first-party ads?
First-party ads, including promoted listings, give sellers and brands another way to attract more buyers to their best items. This non-cannibalistic 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 is unique in the industry in that it operates on a Cost Per Sale model – meaning the seller only pays for the ad when it results in a sale.
Promoted listings on eBay’s platform have been highly successful to date. Based on a recent analysis, promoted listings provide sellers an average boost in visibility of 36 percent*. Today, eBay has over 800,000 sellers promoting over 200 million listings, which has led to year-over-year revenue growth of 110 percent.
And with today’s promoted listings announcement, we’ve increased the eligibility for all sellers in good standing to now have the ability to access and take advantage of this valuable advertising offering. Additionally, we’ve unveiled new enhancements to the Seller Hub, enabling our sellers to adopt and edit Promoted Listings more efficiently, resulting in more effective campaigns that further drive awareness and sales velocity.
A great case study of how brands can also leverage promoted listings is our partnership with Reebok. The company used eBay’s trending ad rate guidance to stay competitive and saw a 55 percent lift in overall sales and 142 percent lift in sales for their promoted items. We want our partners to succeed, and results like these make us excited about the future. That’s one of the reasons we believe that brands like Adidas, Dyson and KitchenAid choose to be on our platform.
What about 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 (e.g. insurance companies, banks, etc.). This offering gives complementary brands the opportunity to utilize ecommerce shopper insights to reach target audiences on eBay’s platform.
The benefits of advertising on eBay
While digital ad spend is increasing, brands are facing greater competition for consumer attention and struggle to pinpoint the best advertising channels to reach their target audiences.
eBay’s ad platform is an invaluable resource to marketers. Our data is different from many large publishers because we’re an ecommerce platform that captures buying intent signals, shopping insights and transaction-level data from 180 active buyers globally. This highly-actionable data enables brands to optimize their ad campaigns to reach a more targeted audience.
eBay is 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 our own, we have a unique opportunity to help brands reach their target shoppers at every stage of their journey, on any channel and at any time. With eBay, brands can diversify sales by creating a new channel, go beyond sales attribution metrics, and form an open partnership to uncover new opportunities.
It's still early days as we continue to build this business, but we’re excited by the early momentum and look forward to accelerating our progress.
To learn more about eBay’s advertising offerings, please visit our eBay Advertising page.
References
** Forrester Report - Retailers: You’re the Next Media Moguls
*** US Market