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One Seller’s Experience with eBay’s New Ad Program

eBay’s new Promoted Listings advertising program for sellers has an easy-to-use interface, confusing pricing, and brings added exposure to listings, according to a seller who has been advertising his eBay listings through the program.

Jason Opdyke began using eBay’s new Promoted Listings ads in June after receiving an invitation to participate in the invitation-only program that eBay is still beta testing. His company sells wifi products through his eBay Store, Rokland.

eBay announced the program in May and has been sending out invitations to Store owners since. In an email invitation sent to sellers in July, it explained, “With promoted listings, your ads can appear in prominent locations on eBay, such as first-page search results.” Sellers specify how much they’re willing to pay, and they pay only when their ad is clicked and the item is purchased.

Some sellers have expressed concern that if ads are included in the search results themselves, it would impact the exposure of non-advertisers’ listings in organic results. Opdyke said that so far, he’s only seen Promoted Listing ads appear to the right of search results. “This means best match is still relevant, as those results will be the focal point of consumer eyeballs.”

Using Promoted Listing ads is a good way to get exposure in really crowded areas, he said. “Some of our SKUs have slower sales rates just because of an abundance of listings using similar keywords. Those listings specifically have really benefitted from promoted exposure.”

He also said the fact he only pays for conversions eliminates the potential for click-fraud that can increase seller costs.

However, it seems the more successful this type of program is for eBay, the less effective it could become for sellers, as indicated with Opdyke’s update:

As an added note, after having used the service for about 3 weeks without increasing our bid percentages yet for any of the campaigns, our daily impressions of ads have declined about 50% each week. It could be other members have joined and outbid us, or eBay is experimenting with when and where to display the ads. I venture it is a combination of both.

The Cost of Promoted Listings 
Sellers pay eBay a percentage of the selling price for ads that result in a sale (that’s in addition to regular eBay selling fees, including Final Value Fees). Sellers specify the percentage they’re willing to pay for a sale.

Opdyke explained, “You check off which listings to add to a campaign and then choose the percentage of the sale price you will pay for each item that sells resulting from an ad click. Your choice is from 1 to 20% and the slider defaults to 3%. You can adjust this any time.” eBay allows sellers to adjust the slider for all ads, or on an individual basis.

He worried at first about the pricing structure. Referring to the explanation in the invitation he received, he said, “This would suggest if you sold 100 items from the listing in 30 days but only one visitor came from the ad, the fee would be charged on all 100. This did not seem right and a call to eBay clarified that only sales resulting from a click to the ad would be charged the fee. This makes sense, but the original wording was not clear. We have since confirmed it is true by following the sales statistics on our campaign page compared to the general sales rate of our fixed price item listings for which we have campaigns.”

User Interface 
Opdyke described the user interface as easy: “The dashboard gives you a quick visual of your impressions, clicks, sales, and the total in ad fees you have paid. You can also see which campaigns the sales came from.”

Measuring Success
“We are not yet clear on how to measure the success, given that any sales that come through ads are desired, and we would rather have them vs. not have them given we are only charged the ad fee when the item has sold,” he said. “We have no communication with competitors or eBay at this point to determine whether our ads are over or underperforming.”

Opdyke said that while the impression-to-click rate seems much lower than Google Shopping ads, eBay ads often appear at the bottom of search result pages. So if a user does not scroll all the way down to the bottom of the page, they won’t see the ad, but it is considered an impression.

eBay ads also appear on the right side of search results, he said, and for some keyword searches, his ads occupy all ad spots on the bottom and the right – “probably because there are no other advertisers for the same search terms, so I would also assume this counts as up to six impressions per page view instead of just one, therefore vastly increasing the impression number.”

Other Thoughts About the Program 
Opdyke said he expected exposure and sales to drop as the program opens up to more sellers, leading to higher bid percentages. “Studies have shown in marketplace environments competitors will often accept rising costs to try to persevere,” he said. “So in the long run this means smaller margins for sellers, more profits for eBay, and perhaps some rising costs to consumers.”

He’s also concerned that eBay might not refund advertising fees in cases where buyers return an item.

He believes the new ad program would be mostly beneficial for people selling used items on eBay for extra cash, such as an old laptop or cell phone. “The most benefit would probably come from trying to sell in very crowded areas where profit margins are large or not a big concern. A person selling a used phone may not be as concerned about whether they bid 5% on the ad service of 15%, vs. normal retailers that have specific per-unit margins. In these areas sellers could afford to make a higher percentage setting for the fee knowing they won’t pay any extra unless the item sells via the ad.”

“We will continue to use the ads as we are only charged when someone buys,” Opdyke said. “If eBay changed to a PPC model then we would have to re-evaluate.”

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Ina Steiner
Ina Steiner
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.