What eBay’s new advertising model means to marketers

As online retail overtakes brick-and-mortar shopping, e-commerce giant eBay’s attitude toward advertising is changing.

The company recently announced that it is cracking down on product ads that link to third-party sites, and is launching an in-house ad sales process in house.

eBay’s ad sales team will aim to help brands create ads to drive sales on its site. Recode reported:

The changes are also meant to appeal to big brands that are looking for new ways to drive sales through digital advertising, as e-commerce eats up more of traditional retail sales.

SearchMarketingDaily explained:

In the coming months, eBay plans to release a product page with sponsored ad units that link to brand-specific pages. New offerings in native, search and sponsored placements will be integrated with tools to analyze the consumers' path to purchase and the brand's market share. eBay attracts about 167 million monthly registered members and about 200 million hours of unique shopping monthly.

The data collected across the eBay marketplace allows brands to analyze consumer behavior and search and buying histories to determine how close the buyer is to making a purchase decision.

Bridget Davies, vice president and general manager for eBay Advertising North America, told reporters:

eBay always knew that we had massive scale, but [advertising] wasn’t our core focus. But it’s actually not an adjacent business; it’s a tool kit for brands and requires investing into it.

The move is a departure from the company’s past attitude toward digital advertising.

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“For years, eBay’s advertising business was something of an afterthought compared to its core commerce operation — so much so that eBay had another company selling ads on its behalf,” Recode reported.

Many view eBay’s move to bring advertising in house as a direct response to Amazon’s efforts in the same space. The company reported $313 million in marketing services revenue in Q4 2016, which is a 4 percent year-over-year decline.

What does the change mean for marketing pros?

It shows that eBay is serious about helping brand managers drive sales on the site. It also marks an evolution for eBay from online auction house, which only comprises 13 percent of its sales now, to a broader online marketplace for brands.

It also highlights how online shopping is growing, which underlines the necessity to use digital marketing tactics in organizations’ product campaigns.

Marketers would do well to keep abreast of current restrictions on online shopping sites where they sell their products, so that they can more effectively boost their bottom line—but not get their efforts booted for breaking the rules.

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