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eBay: We Can Tweet Our Way Out of This

The eBay discussion boards contain many reports of a drop in sales by individual sellers – unfortunately, eBay took away sellers’ ability to track traffic, so it’s difficult to pinpoint the root causes of the decline.

While some might dismiss the reports for their anecdotal nature, it’s clear from eBay’s quarterly earnings that growth has slowed – and it’s clear from Amazon’s earnings that it sales are growing at a much faster rate than ecommerce in general, indicating shoppers are finding it to be a viable alternative for their shopping needs.

eBay admits it has a problem, revealing two weeks ago that its active-buyer growth rate was down 2% from the first quarter, a decline eBay’s new Chief Financial Officer Scott Schenkel said was expected, blaming it on SEO challenges and friction from its cybersecurity incident.

The company’s new CEO is hoping social networking sites will be its salvation. eBay CEO Devin Wenig told analysts this month that social networking sites was an important part of his strategy to address the problem.

“We also continued to experiment and grow new sources to diversify our traffic for consistent long-term growth. While still small relative to our more established channels, traffic from social channels is growing over 100% year-on-year in the U.S. On Facebook, we’re early adopters of dynamic product ads, which enable retargeting on mobile. And on Pinterest, eBay’s inspirational shopping content is driving very high engagement and click-through rates. And this success has positioned us as the top advertiser on the platform.

“We’re also focused on growing our newer channels including Instagram and Tumblr and we’ve recently launched efforts on Snapchat and Periscope. We view social media and messaging platforms as a great way to reach our customers in the places they love, while allowing us to diversify our sources of traffic and user acquisition for consistent long-term growth.”

Interestingly a new Shop.org/Forrester Research report shows that retailers rely on search engine optimization (SEO) and search engine marketing (SEM), aka paid search.

In terms of how retailers are allocating their digital marketing budgets, SEM came out on top (33%), followed by SEO (16%), and online marketplace initiatives and operations (16%). While marketing via social channels is growing, it came sixth on the list at 11%, according to the study.

One question analysts didn’t ask eBay is why they felt better about paying social networking sites for traffic while downplaying Google advertising.

Can Facebook, Pinterest, Instagram, Tumblr, Snapchat and the like make up for the lack of traffic coming through Google? eBay’s Wenig seems to think it can’t hurt.

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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). She is a member of the Online News Association (Sep 2005 - present) and Investigative Reporters and Editors (Mar 2006 - present). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com. See disclosure at EcommerceBytes.com/disclosure/.