Thursday, September 25, 2008

Upon Further Reflection - eBay AdCommerce

I read through the multiple AdCommerce announcements from yesterday, as well as the responses on eBay Ink and I have to say, I don't see the value here. I participated in the old Banner ad program, at the top of the SRP (Search Results Page) and got just a few click-thrus. eBay eventually canned that program in favor of Yahoo Display advertising.
To me, this program would only have value if they allowed sellers to click out to their own websites from the ads, or if there was no FVF on purchases made through those links.
eBay, of all companies, should know how expensive online advertising is, because they have pulled back on their own online ad spending, what makes them think cash strapped eBay sellers are going to pony-up more advertising dollars? Aren't insertion fees supposed to give them the exposure they need in search? Or is this just another way for the Diamond sellers to get broader exposure on the site, in categories and searches where there listings would not normally be found? When you don't pay listing fees, like the Diamond Sellers, it might make sense to try a PPC program for the added exposure, but for the regular, rank-and-file seller, paying the additional fees just won't generate the needed ROI (Return on Investment).

Why not allow sellers to link off the site? Amazon does it with their Product Ads program. 
eBay may still be a 300 lb. Gorilla, but they are more like the gorilla in the Inflatable Madness logo than King Kong. They have a perfect opportunity here, to give sellers a real advertising value and allow them to link out to their own websites, but instead they continue this "walled garden" approach to the site. 
A seller responded to yesterday's AdCommerce news; "It makes no sense to me if they aren’t going to let sellers advertise their websites."  and here was eBay's response: "People come to eBay to shop. Buying an ad on eBay gets your product in front of them when they are actually shopping for things you are probably selling. These ads have a similar look and feel to regular listings and we think buyers would be concerned if they clicked on one and were taken offsite. Rather, we think that a consistent shopping experience that is under PayPal’s buyer protection plan makes buyers more confident and more willing to buy more stuff from smaller businesses. Small business is the engine of eBay, and our ad network is here to serve their needs for more exposure to likely buyers.
In addition, ProStores users who sign up for our new Pay Per Sale model will be eligible to receive exposure on eBay. In this way, they can advertise their off-eBay items, and we think we have a very compelling opportunity for ProStores users to monetize eBay traffic as well." (bold is mine) 
How can they say this with a straight face? "we think buyers would be concerned if they clicked on one and were taken offsite" yet, they are already allowing non-eBay sellers to use Yahoo sponsored ads to click off to their own websites and they follow up that comment with "ProStores users who sign up for our new Pay Per Sale model will be eligible to receive exposure on eBay." What are they smoking up there in the executive offices at eBay? Let's see, we think it would be bad to click off-site unless of course you are paying us more money by using our Pro-stores.
Back in the day, this may have made some sense, when store listings were free and the FVF was 8% but not now when FVFs are rising and eBay still charges listing fees. After all, what are eBay sellers paying for now? Aren't they actually paying for exposure. Why would there be any additional need for a PPC program to link to their current eBay listings. Let's see... I can pay 35 cents to list an item for 30-days and then pay 15% to eBay when it sells and wow, now I can add a PPC program to pay eBay even more money.
My suggestion to eBay sellers is to run on over to Amazon.com and take a look at their Product ads program. This is what Amazon says; "Product Ads is an advertising program that allows sellers to promote their products on www.amazon.com. As a seller, you simply upload your catalog and set your cost-per-click bids. Amazon will then display highly targeted ads for your items on select product and search pages. Customers can click over to your web site and purchase the product directly from you."
After all, with a the upcoming holiday season approaching, where do you think the customers will be.

Just my 15%

19 comments:

Cliff Aliperti said...

Hi Randy,

First I've heard of the Amazon ad program, but checking it out that didn't thrill me either--if I had the same item that was on the page, why wouldn't I just actually list it on Amazon and pay Seller fees rather than Advertising fees?

Maybe for related items or related websites, but for the same item, just like eBay I don't see the sense, and I'd be pissed if I were another seller of the same item.

Looks like the same pig to me.

Miss Understanding said...

I'm beginning to really enjoy the announcements from ebay. Anything they say is a great laugh. They've gotten desperate now, and its starting to get to the point where it's ridiculous. Is it time to stick a fork in ebay? Is it done yet?

Randy Smythe said...

Cliff,

Amazon Product ads will create a detail page if the item is not already in their catalog.

Here is the info from the website:
"If your product is new to the amazon.com catalog, a new product page will be created using your item title and description and your ad will display on that page."

The eBay AdCommerce program is meant to let sellers expand into other searches, that their listings would normally not appear in. They can bid on keywords to get buyers to their store or listings, but sellers still have to pay the eBay listings and FVFs.

With Product Ads on Amazon, they take you to your website where there are no additional FVF's

Ophylia said...

In the future, college business classes will teach about ebay as a lesson in what 'not' to do with a business.

Cliff Aliperti said...

Well, the new page is something. I guess if your item is unique enough then it'd be like paying for a personal page of Amazon PR.

Still not wild about ads appearing on pages with 3P products, but the different structure of Amazon product pages makes this less offensive.

Okay, it's a better program, I'll concede the point.

nadine said...

Randy, this model makes no sense for regular eBay sellers who still pay eBay fees. But it makes great sense for the new diamond sellers who don't pay listing fees.

We have to stop thinking that eBay's business model is still concerned with regular eBay sellers. Plainly, the new diamond sellers are IT, as far as eBay management is concerned. eBay has developed a black market attitude towards its regular sellers - milk'em for all they're worth, they're leaving soon anyway. This is a self-fulfilling prophecy. Bad money drives out good, as the old saying goes.

I hope a good writer is taking good notes as this unfolds. There are the makings of a fascinating book here. Does eBay management consciously intend to do what they are doing, or are they really as clueless as they seem?

Randy Smythe said...

Nadine, you are absolutely correct, but if you read their response on eBayInk they are positioning this for small sellers. "Small business is the engine of eBay, and our ad network is here to serve their needs for more exposure to likely buyers."

After the up-coming layoffs, I'm sure there will be some interesting tidbits coming out.

Henrietta said...

Never having been a PS never mind a diamond PS this post is idle speculation.

How many people are employed at how much per hour to make between 800K and 1.2M listings on three day BINs? How many in CS to answer questions?

How much was saved in labor by going to FP30 GTC?

With a 2% - 3% sellthrough rate (I know, if you don't pay IF it should not be called sellthrough) and whatever special deal FVF is paid is there a good enough ROI to justify the effort and expense?

They have their own website where they don't have to wipe buyer noses like they do on eBay; which means lower labor expense and general aggravation.

Just thinking.

Anonymous said...

A long-lost Seller Central Discussion poster, whom I regret not remembering, predicted this happening after Ebay began selling exposure to the UK in order to overcome Best Match.

Man he nailed it right on the head.

"Make us pay for natural exposure?" I scoffed at him, "Not even ebay would be that stupid"

er- I stand corrected

Anonymous said...

I agree that it is for sellers that don't pay listing fees (diamond sellers).

It also contradicts their own statement
"Essentially, the AdCommerce program will act as another way for good sellers to raise visibility on eBay. "

Because what eBay says makes a good seller -high DSR has nothing to do with this program.

This program values the large seller with low DSR who can't get on the front page any other way. PERIOD. It isn't designed to foster better customer service.

Anonymous said...

The Transient EVIL has engulfed Our Sacred Ebay.
How to purge it is the next order.
Ebay is now synonymous with "Overnight Communist Take-over".
If this can happen in Business, It WILL HAPPEN in Government.
The Phrase "Uh Oh...They're Doing an Ebay" will refer to the Flash Communist Conversion of an Entity.
The American Free Market Economy, in which Everything from Corn to Cash to Goat Eggs can be used to obtain goods & services, MUST NEVER DIE.
Our Military's SOUL PURPOSE is to Defend THIS VERY THING. And it may well come to this.
Our Nation and Our Entire WAY OF LIFE is Under Attack by Home-Grown Financial Terrorists. We MUST make an Example of these Criminals in a Way that Sends Shivers down the Spine of ANYONE contemplating following in their footsteps. Put these Financial Terrorists into LABOR CAMPS for LIFE, and work them HARD until their natural deaths. It is The ONLY way to Preserve Our Precious System that So Many Have Died to defend.
I, for one, Will Not Spit On Their Graves.
nymarts.com

Randy Smythe said...

Anonymous,

That comment just gave me a headache over my right eye, thanks a lot.

Anonymous said...

"The Transient EVIL has engulfed Our Sacred Ebay.
How to purge it is the next order.
"

Ming is that you?
: )

Anonymous said...

Randy, you really nailed it with this great post, cheers!

Few sellers are going to be foolish enough to fall for this new
ebay AdCommerce crapola...

My theory is this:

Either ivory tower management are really that out of touch with their seller base, yet again (to offer such a bad deal)....

OR, when the site SOON becomes flooded with more corporate/diamond seller ads, they can say to us longtime independent sellers, "well, we offered this great deal to YOU, too-not just the diamonds".

Either way, things are still looking bad out here. I sell media and since FP30 and the new glitched Best Match, my sales are DOWN by about 40%, almost overnight....

Stephen

Moonlight said...

Further evidence that eBay is heading toward being an advertising portal only.

David said...

I have an idea, why doesn't eBay improve the Home Page Featured option.

Back in 2002 it cost $100 for Home Page Featured item. They raised it to $200 in 2003. Then they lowered it to $40 for 1 item and $80 for multiple quantity and it became useless.

The auctions on the front page are barely even noticeable.

Back in 2002 I used to be able to list a dutch auction or use the home page featured and get 80 - 100bids. It was awesome!

It's completely useless now. You have to scroll down to the very bottom of the page to see the featured items.

Anonymous said...

With the economy on the rocks, sales volumes are down as well as prices; this "new" program is just another way for Ebay to maintain their revenue stream at the cost of their sellers. Fee-Bay has forgotten that without sellers, they have no business. I have talked with a number of fellow powersellers and most of them are waiting for some other viable option to come around before the leave ebay behind. We must move in mass to leave ebay and take a leap of faith to move our business to some other viable online sales site. As for me, I can no longer afford to give an increasely larger piece of the pie away to ebay JUST so potential buyers may get to see my items. If you don't give in to this new scheme of ebay, they will just end up burrying your items in so many layers of junk that your items will either never be seen or they will not reach their full sales potential. I have already opened up shops on Etsy and Bonanzle where fees are VERY reasonable. Both these sites are fixed price and not auction so as a seller you will need to do your research on value and not depend on the market to establish it. Dont wait for change, MAKE IT HAPPEN!

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