eBay announced this morning that they were “introducing a new program called eBay AdCommerce.”
The current version purports to “allow eBay sellers to promote their stores and listings via enhanced text integrations on eBay search result pages. The ads can be targeted by keyword or category, and eBay buyers who click on these ads will be taken directly to sellers’ listings or stores on eBay.”
How does this compare with how our friend Ina Steiner at AuctionBytes described “Keywords on eBay” launched June 24, 2003? “‘Keywords on eBay’ enables eBay sellers to reach targeted buyers on eBay through “bid-per-click” keyword advertising.”
So my initial impression is that eBay+DoubleClick=”Keywords on eBay” and eBay-Doubleclick+5 years=eBay AdCommerce.
The most interesting part is that eBay dropped the Keywords on eBay program in September of 2006 (no doubt when the DoubleClick multi-year agreement expired). While the program had some fans, eBay sellers apparently didn’t understand the concept of paying eBay a listing fee, a final value fee, and then some additional fee per click to drive traffic to the same listings they pay eBay a lot of money to drive traffic to. Sophisticated sellers could identify a way to make the extra promotion work for their businesses, and eBay gave this placement gratis to some large sellers (particularly to large storeowners). Generally, however, a successful program would not have been terminated in 2006 without an inside effort already complete to take its place. Indeed, eBay announced at the time that “The eBay Keywords program has been used by a very small percentage of eBay members since its launch in 2003.”
So what changed? Why bring it back now? I think a lot, and today’s introduction hints at other possible changes to come.
I wondered aloud a few things back in 2006 (on a no longer maintained personal blog). In a short post on the Keywords cancellation I wrote “I sincerely hope they don’t throw away the code used to enable sellers to bid and track the performance of the ad spots in the Keywords program. If eBay later realizes that this system should be leveraged to drive more revenue from featured listings through competitive per click bidding, I’d hate to have them start over again from scratch. ”
I had earlier written a VERY LONG post regarding some of the Store Item Format (SIF) inclusion changes in 2006 (remember that painful time?) and a long list of suggestions. Included in that post were the following nuggets that scare me reading two years later.
Seeing eBay purposefully limiting the number of listings displayed in search, I said, “My belief is that the problem isn’t too much content, but an inefficient mechanism for providing buyers the best buying option when they search. The problem is with the search engine not doing a good job displaying to buyers items of best match. [OMG, I actually said at the time items of "BEST MATCH"]. While other comparison shopping engines are scraping the world’s servers to get the most shopping options for consumers, eBay is *limiting* what buyers can find in the hopes that the items remaining will be good buying options. It’s a high-risk game, and I don’t like that answer.”
As for recommendations to address this issue?:
“First, change the ‘standard’ listing and final value fees to a variable scale that is category dependent. First run textbooks have very thin margins….Second, dramatically change the structure and pricing for featured listing placements. The restructure involves a) shrinking this section to a manageable number (yes, like Google does with AdWords), b) identifying an appropriate algorithm for display that includes seller fees for that item, the item performance (how many folks visit it), the seller’s historical performance (i.e. does this seller give good pricing generally), and other data that may be available, c) don’t sort this section by time to close (it’s not going to be so big a section that causes issues for buyers finding the one closing soonest), and d) have this section appear on all search results pages above the main results.”
I went on to suggest that eBay move away from flat rate pricing for category featured and into more of a bidding model (in a way similar to AdCommerce, but more on a listing fee/FVF approach). My overall thought was that if eBay wants to be the World’s Marketplace, it should have incredibly affordable “base pricing” to get listed (this is similar to natural search in a search engine like Google or Yahoo!) and charge premiums for heightened site exposure (AdCommerce does the trick here as does more folks being able to afford Category Featured placement across more categories). Obviously, this latter part is essentially “sponsored search” on eBay.
Could it be that eBay is moving more to a model that reduces fees for the masses but enables more price descrimination (to collect a higher take rate from those who can afford it) for search exposure?
As for why they tout eBay AdCommerce as something new? It’s always much more exciting to be part of launching a new program than bringing an old one back, even in a different form;). I’ll let it slide for the masses. Vendable readers know better:)….