Friday, October 24, 2008

A First Look at the eBay AdCommerce Program

Several years ago, eBay had a banner ad program for sellers that allowed them to bid on certain keywords and have a banner displayed at the top of search. I participated in this program at Glacier Bay DVD. 

I remember that I loved the idea of my company name getting millions of impressions on eBay, but that the click thru rate was terrible. It made sense for me at the time because, I sent buyers to my store and the FVF at the time was 5%.

Now, many years later eBay is trying to sell ads to sellers again, with AdCommerce. In fact several select sellers are now part of a pilot program that will begin running soon.

Thanks to ColderICE, for pointing me to a video for the new service, explaining how it works.

I'm on record for not liking this idea for a couple of reasons:
  • For low margin businesses, it doesn't make sense; at least to me. You are already paying for listing fees and FVF on the items you sell, so paying for clicks also just doesn't make sense. 
  • They only allow you to link to eBay items or stores. If they allowed you to advertise your website, I would be one of the first people in line. 
It may be a good program, or at least worth a test, if you have high margin, high velocity product. With "recent sales" such a big part of Best match right now, AdCommerce may be less expensive than Featured First and Featured Plus to get that additional exposure and increase your odds at winning the sku in Best Match.

The biggest problem I see with the AdCommerce program, is that the Diamond Sellers who have a lower fee structure and can afford to spend a little more on this AdCommerce program, will quickly be bidding up the keywords, so much that the regular sellers can't afford the program.

Just my 15%

23 comments:

TheBrewsNews said...

For most categories in which we sell, we are a niche seller so it just doesn't make sense to spend any more $ to advertise to eBay buyers who are already on eBay and who find us easily.

Selling on eBay is actually a form of advertising for us as we drive traffic from eBay to our other venues so it doesn't make sense to increase our "eBay advertising budget" since the price to advertise on eBay is already so expensive.

Randy Smythe said...

Brews,

That certainly was my thinking, but if they let you advertise your website would you sign-up?

permacrisis said...

To accept current conditions on ebay is to condone them.

To sell under Best Match on ebay is to legitimize it.

To pay additional monies to ebay, in order to overcome an artificial barrier erected by ebay to natural exposure, is extortion.

AdCommmerce is ebay's acknowledgement of the above conditions.

AuctionWally said...

Good points in this article Randy. It seems eBay wants an open source attitude from sellers, yet gives them back a closed system in return.

My mantra: Get your own site going and keep it shiny. Then use eBay and other good platforms to spring off from.

Randy Smythe said...

AuctionWally,

Good advise. The most daunting task in having your own website is marketing and you are paying eBay, Amazon, Buy.com and others 15% or more for the traffic.

It takes some hard work to get website traffic but in the long-run it will pay off.

TheBrewsNews said...

Randy, you bet I would advertise my own ecommerce site... in a heartbeat!

ms.pat said...

I would even spring to advertise my website and I'm basically a small seller. My website is picking up business weekly so all it needs is more exposure. You're right auctionwally - anyone who is dissatisfied with ebay and wants to quit them and set up a website had best be prepared for the work involved. When I tell sellers this they kind of change their mind.

I don't like anything Ebay is doing lately. They seem to have forgotten they are supposed to bring buyers and sellers together and just settled for squeezing every drop of revenue they can get out of the sellers....then wonder why sellers are leaving! This is a company that has to bottom out before it can put its giant attitude aside and work with its customers!

In the meantime I'm thinking of buying some click thru ads on Amazon at least for two months. Any input on that?

Tony P. said...

Randy,

I thought that old banner program was free? Not exactly free, but included with Premium and Anchor store subscriptions. I never had one of those stores, so I don't know for certain.

I remember when Bill Cobb made the announcement about the Yahoo sponsored ads he stated that the banner ad program, which had been discontinued a few months earlier, would be resurrected within the new Yahoo ads.

Two years later his word is kept. For a price.

Randy Smythe said...

Tony,

I got a certain number of clicks for free because I was an Anchor store and then I had to pay for the others.

I loved the millions of impressions with my Glacier Bay banner but it just raised awareness of the brand. It was hard to calculate the ROI.

David said...

Tony when I hear the words Bill Cobb or Meg Whitman, I never thought I'd say this but I'm starting to miss these people.

I sold a product where I made $10 per sale on Google ad words. It would take me 200 clicks to get a sale, and I was paying 5 cents a click.

I broke even, or made/lost a small amount of money but it wasn't worth it and I eventually disabled my campaign.

Pat, are sellers really leaving? I know a few have left like emovieposter.com but have enough left to where wherestreet is worried?

ms.pat said...

david - everyone I know has either drastically reduced their listings or they are not listing on ebay at all. Other sites are full of ex ebay sellers looking for another venue. I list only in the arts categories and Ebay has completely ignored the needs of that category - they treat us like we're selling iPods. I was recently downgraded in the listings and I have 100 percent feedback, over 3,000 never a neg and DSR's of 5.0 and have almost 300 feedbacks for this year. They told me I was downgraded because I didn't make enough feedback in the last 30 days! I paint! I'm not an assemblyline worker or selling wholesale goods. Same with my artist friends. They're leaving! Go on the discussion boards and all you hear is sellers that are leaving. (shrug)

nadine said...

david, it's hard to measure how much sellers are leaving when eBay is doing so much to confuse the # of listings metric. In past years, you would see a kind of natural progression in # of listings: high in the spring, lower in summer, high in the fall, peak in Nov/Dec. That's gone this year because of a) pumping in millions of Buy.com and other diamond seller listings and b) millions of store listings shifting to Core FP in the favored Camera and Electronics categories.

But my sense is that yes, sellers are cutting back. Not so much leaving altogether, but moving to a new multichannel stance where their own website is Number 1, Amazon is Number 2, and eBay is "the venue of last resort," as PESA put it recently.

What we really need for comparison are yearly dollar volumes of transactions on eBay by the major long-term sellers. Actually, Scot Wingo of ChannelAdvisor might have such figures.

Anonymous said...

I hate to say it but more sellers are staying than leaving.

Sellers who can still make enough of a profit are staying. Pragmaticism will rule the day for serious business people.

Sellers who truly rely on the income to get by, (no matter how small and awful are staying). Money is money.

Large sellers who live on cash flow only velocity (with no real business net profit) are staying though it's getting much harder to do that and I've noticed NARUs are going up.

Hobbyists and part-time sellers who don't RELY on the money to survive and buy groceries are leaving ebay-but ebay doesn't see their growth and GMV stabilty in those kinds of sellers, sad to say, but it's true.

In sum, I think millions of people will sell continue to sell on ebay, if there is a buck to be made, no matter how much we all hate dealing them.

Furthurmore, go Bonanzle, Etsys, and Amazon! Take us away and prove me wrong in this lifetime!

Bob

Randy Smythe said...

Bob, yep sellers are still selling on eBay. Some can't leave because of the cash flow and they aren't established enough on their own websites and other venues, but some folks are still doing well on eBay.

I talked to a seller this morning who gets his product at such a fantastic price, even with fee increases he is still making good money.

I think the Diamond sellers will find that eBay is not their cup o' tea and leave before many of us even know they were here.

John of 3rdPO.com said...

I will reserve my full comment until I can ponder it more. However, I see no issue with this at all. There is ALREADY crappy ads on eBay and to think this will somehow change the mix to me is not really all that relevant.

Natural search on Google out ranks Adwords with most usablity studies so the human brain weeds out clutter (like most people do my Tweets on Twitter, LOL)

The imbalance of a Diamond sellers with no fees getting to play with this tool is really NOT FAIR, so we will see if they too get to use it.

Other than that, I really can not see any real reservations to the addition of the ads to the platform and at this rate I do NOT begrudge eBay making more revenue from internal advertising from seller inclined to use this tool...

That is my 2 cents on this one, but it is subject to change at ANY time

John (ColderICE)

Anonymous said...

Randy, its great to see you lead the anti-eBay crusade. You are an inspirational leader to those of us trying to bring eBay down. Thanks!!!

Judy said...

Are sellers leaving eBay? I can only speak for eBayAU, but yes, they're leaving.

When my last few listings finish, I'm not selling there any more. The PS Board is full of posts from sellers who have either left or are about to.
And for me it wasn't that I didn't make money selling on eBay, but the constant changes and having to edit and relist items was taking too much time that I can put to better use - listing on my own site, improving SEO and giving excellent customer service without having to worry about eBay's idiotic feedback system.

Randy Smythe said...

Judy, that is the concept I'm trying to get across on this blog. eBay is way too much work for the money you can make.

For some that is okay, for me it isn't. Sounds like you agree.

David said...

About the NARU'd users.

I got a ton of negs this past May and thought I was going to get suspended.

My seller dashboard was "unacceptable" for nearly a month.

I never got suspended but what's funny is that most of those negs that were left for me in May are gone because most of the buyers who NEG'd me got suspended and their feedbacks were removed!

My feedback is now at 99.8%

Judy said...

Randy, I agree with you 100%. Love this blog - thanks for keeping us all up to date on all things e-commerce.

Anonymous said...

When ebay began charging US sellers for search visibility in UK, the timing couldn't have been worse.

Best Match had just been announced as the default search, and sellers were very upset. To charge extra for visibility was a monumental PR blunder.

At that time, the more cynical sellers theorized that sooner or later, US sellers would have to pay for US visibility. They were roundly dismissed out of hand. Why, no site that lived and died by member exposure would be that stupid.

Well... while this AC isn't exactly that, Randy, it does smack of those earlier, nutty predictions.

With aluminum nearing 65 cents a pound it's no wonder ebay does everything it can, to encourage the use of tin foil!

About the only revenue stream ebay hasn't explored thus far: A DMV 'reinstatement fee' for suspended sellers! Mark your calendars... any day now...

ms.pat said...

To be sure. I keep my tinfoil hat at the ready whenever I go onto that site :-)

Faith said...

I agree with Judy and I am on Aussie eBay. I am presently culling my store listings so that I will still only be paying the same amount for my lot of items - mainly secondhand books. eBay rang me up last week, to ask about the changes and I gave them my usual blurb that both sellers and buyers are their customers and it behoves them to look after both - which they do not seem to be doing at present. I have been using eBay since 2000 and I must say it has gotten more and nore complicated for sellers. Will be thinking seriously of listing on other cheaper auction sites like Oztion, where I already have about 400 items. it is slow there, but people tend to buy multiple items.