Thursday, October 18, 2007

eBay's Hail Mary!

Now I understand where eBay came up with the idea for the Hail Mary ad in their "Shop Victoriously" campaign because this 33% discount promotion is truly a Hail Mary for the company (Thanks to my friend at OnlyeBay for giviing me the idea). Even Meg says

The other thing is we want to see what happens when we take a price decrease of this magnitude. What is the listings elasticity? What is the conversion rate? What is the nature of what we do here? I think the learning over the last 12 months, let me speak for myself personally, is we have a number of different levers to pull. We've got product levers, we've got marketing levers, we've got customer support and trust and safety levers and we have a pricing lever that we have not ever really decreased price. It is possible that by decreasing price, we actually increase the revenues and vibrancy of this market in such a way that this price decrease is more than self-liquidating.

Now, I don't know that that's going to happen. But we were very much in favor of saying let's see what happens when we take a pretty significant sustained decrease in insertion fee in our largest market. Let's see what happens there. It may well be better for sellers, and interestingly there, better for buyers. We may end up with a win-win. But we will see, and we will report back in the first quarter. Source: the transcript of the 3rd quarter earnings call from Simpley Alpha

So here is the ad again, now visualize Meg as the Quarterback, investors in the stands, and sellers as the players etc. eBay better hope the seller catches the vase.

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