Merchants say eBay ad programs drive buyers away

October 8, 2007, 08:47 AM —  IDG News Service — 

EBay Inc. has significantly boosted its advertising revenue since last year, but some sellers worry that the company's efforts in this area are driving potential buyers away from the online marketplace.

Last year, eBay signed deals to run ads from the Google Inc. and Yahoo Inc. networks in order to better capitalize on the massive traffic it draws to its Web sites, primarily its core eBay.com marketplace.

The strategy seems to be working: In 2007's second quarter, ended June 30, eBay's advertising revenue almost doubled compared with the same period in 2006.

The very influential Professional eBay Sellers Alliance (PESA), a group of large eBay sellers, has been watching from the sidelines with increasing concern and skepticism.

"Having those ads on the Web site we view as very negative. Encouraging people to leave eBay can never be good for the seller who is paying to be on the marketplace," said Jonathan Garriss, PESA's executive director.

While eBay has had advertising on its Web site for years, sellers generally hadn't perceived it as a major threat, for a variety of reasons.

For instance, the advertising program that the Yahoo deal replaced in May of last year was run in-house by eBay and was designed to let eBay sellers promote their products in the marketplace. In other words, the ads didn't link outside of the eBay Web sites.

Also, whenever eBay has allowed external ads in its sites, as it did in the late 1990s and early 2000's via a deal with AOL LLC, the ads weren't as precisely targeted as is possible with the current ad-matching technology from Google and Yahoo.

Now, with Google and Yahoo delivering ads that are contextually relevant to the eBay pages on which they run, eBay sellers feel that the barbarians aren't just at the gates, but inside the marketplace's walls, luring buyers away.

The deal with Yahoo made it the exclusive provider of pay-per-click (PPC) text ads and banner ads for eBay sites in the U.S., while the Google deal, signed a few months later in August 2006, is for PPC text ads in eBay sites internationally.

In the second quarter of 2007, eBay reported $76 million in advertising and "other non-transaction revenue," an increase of 96 percent from the same period in 2006. An eBay spokesman acknowledged that most of that revenue came from advertising.

Making some rough calculations, Garriss believes that eBay visitors clicked about 250 million times on the Yahoo and Google ads during the second quarter. "The biggest issue is seeing ads that compete with products already on eBay," Garriss said.

Hani Durzy, an eBay spokesman, acknowledges that the company has fielded concerns from sellers about this issue, but he argues that the worry is unwarranted.

Sign up for ITworld's Daily newsletter
Follow ITworld on Twitter @IT_world

I like it!
Post a comment
The content of this field is kept private and will not be shown publicly.
  • Allowed HTML tags: <a> <em> <strong> <cite> <code> <ul> <ol> <li> <dl> <dt> <dd>
  • Lines and paragraphs break automatically.
peer-to-peer

jfruh
Apple syncing patent can't come soon enough

pasmith
New Twitter features borrow from 3rd party clients

Esther Schindler
Open Source Changes the Software Acquisition Process

mikelgan
How to set up continuous podcast play on the new iTunes

David Strom
Five important Windows 7 mobility features

sjvn
Guard your Wi-Fi for your own sake                        

Sandra Henry-Stocker
Grepping on Whole Words

 

Sidekick: The Good News & the Bad News
Either way you look at it Microsoft Data Center management did not follow standards or best practices in this failure. In which case it makes me wonder more about the outsourcing of corporate data much less personal data.
- mburton325

Join the conversation here

The Daily Tip

The Daily TipQuick, practical advice for IT pros. Made fresh daily.

Hot tips:

Want to cash in on your IT savvy? Send your tip to tips@itworld.com. If we post it, we'll send you a $25 Amazon e-gift card.

Newsletters

Subscribe to ITWORLD TODAY and receive the latest IT news and analysis.

I would like to receive offers via email from ITworld partners.
By clicking submit you agree to the terms and conditions outlined in ITworld's privacy policy.
Featured Sponsor

AISO founders envisioned a Web hosting company that was environmentally friendly. While the company employed energy-efficient innovations like solar panels, its infrastructure produced unacceptable power and cooling requirements. Find out how AISO leveraged AMD technology to overcome their challenge in this case study white paper.

In this whitepaper, Scalar explores the opportunity to change the landscape with respect to mission critical databases built around Oracle. Leveraging technologies such as Linux, high-end commodity processing power and Oracle RAC technology to architect, design, build and maintain database infrastructure that delivers maximum availability, reliability and performance at a fraction of traditional cost.

On a typical day, weather.com, the Web site for The Weather Channel in Atlanta, serves up between 15 million and 20 million page views. But in September 2004, when back-to-back hurricanes ransacked Florida, the peak traffic on one day more than tripled: over 70 million page views by more than 7 million unique visitors. Read the full success story now.

Marketplace