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EcommerceBytes-NewsFlash, Number 1615 - September 05, 2007 - ISSN 1539-5065    1 of 4

eBay Sends Shoppers Off Its Site with Yahoo Ads

By Ina Steiner
EcommerceBytes.com
September 05, 2007




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eBay has ramped up testing of its ad program with Yahoo on the US site, and sellers - and possibly some eBay executives - are concerned about the possibility of the ads cannibalizing eBay sales. The ads appear in a section called Yahoo Sponsored Links at the bottom of eBay search results pages and now compete directly with eBay's own listings.

eBay has told sellers that the Yahoo ads would appear where there were no matching eBay items, or for complementary items, both in the original announcement and during June's eBay Live Conference (http://www2.ebay.com/aw/core/200605250457542.html and http://www.auctionbytes.com/cab/abn/y07/m06/i18/s04).

That is no longer the case. For instance, a recent search for "Nike Women Sneakers" showed eBay listings followed by Yahoo ads, including ads for sites selling sneakers such as FinishLine.com (Shop the Large Selection of Nike Women's Shox & More) and DrJays.com (DrJays.com has a wide selection of Nike women's shoes on sale in our online store). Similarly, a search for collectible Longaberger baskets displayed ads for competing sites on the same page as eBay's own listings.

A seller wrote to AuctionBytes on August 23rd, "Today while searching for a Toshiba stylus on eBay, I was dumbfounded to see 3 huge links in the middle of the page, offering the same item that several poor eBay sellers had paid to list. For less ! Live links ! to other sites ! including AMAZON !!"

The competing ads are actually appearing ahead of many of eBay's own listings. On September 3rd, a search for "Nike Women Shoes" showed 1006 matches on 21 pages. But the Yahoo ads appeared on all 21 pages of results. Shoppers viewing the first page of results saw ads for competing sites ahead of 956 of eBay's own listings.

In an interview with MediaPost's Behavioral Insider, eBay senior counsel of Global Privacy Practice Scott Shipman acknowledged concerns over the Yahoo and Google ads. He told the publication, "The key notion, as you can imagine, is that we don't want to cannibalize the activity on the site and direct people off of the Web site. So we are very sensitive to where they appear and the content they are advertising." (http://blogs.mediapost.com/behavioral_insider/?p=187)

However, as a thread on an industry discussion board revealed, sometimes the Yahoo Sponsored Links contain adult ads, such as the one containing the description, "Meet Sexy Local Housewives For Real Nasty Sex. Every Type and Fetish." (http://www.vendio.com/mesg/read.html?num=2&thread=665396).

eBay spokesperson Catherine England said eBay does have some control and filters in place for the ads, but said the process is highly automated and is not 100% fool proof. "The ad that you saw was not specific to eBay but slipped through Yahoo's system and was being served on their entire ad network. We've alerted Yahoo to the ad so they can remove it. Yahoo has been very responsive as we've reported various ads to them and we continue to improve the way we work together."

Yahoo also serves up the graphical ads on eBay. In May, the AuctionBytes blog reported Yahoo was serving up ads on eBay for Netflix on search results for DVDs. Netflix offers shoppers DVDs for rent and for sale (http://tinyurl.com/3bgc9f). The ads for Netflix continue to appear when searching for DVD tiles on eBay.

When asked if eBay had geared up the Yahoo ads, England said testing is ongoing and will continue over the coming months. She said visitors to the site may see different advertising formats, in different places, for different types of items, including sponsored links and graphical advertisements, and sometimes no advertising at all. "We're working hard to determine the best ways to integrate and optimize advertising on eBay, including showing ads to the right users, using the right ad network partners at the right time, and allowing ads from the right advertisers. In our testing, our focus is on understanding whether there is any impact on our transaction business from advertising. This is our primary concern as we are not looking to take business away from our sellers as we enhance our user experience."

When asked about eBay's statements about the conditions under which Yahoo ads would appear, England said, "In Bill's original post about the Yahoo agreement, we did say that we were starting our testing on null search results but also pointed out that we'd be testing other placements too, including complementary items. Due to the very nature of testing - we didn't explicitly state what we would and would not test moving forward. What we did clearly state is that we would not place these ads on view items pages."

Have an opinion about Yahoo ads on eBay's site? Leave a comment on the AuctionBytes Blog, and read what others are saying.

http://tinyurl.com/2uvbhj

About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.

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