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Thu Jan 29 2009 10:02:12

Do eBay Ads Cannibalize Sales?

By: Ina Steiner

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In today's AuctionBytes Newsflash, I report on eBay's push to grow ad revenue. eBay has been getting more aggressive with its ad placement, especially outside North America. Ads now appear on View Item pages and on My eBay. For several years they've appeared on search results pages, including ads that directly compete with the listings served up in search results.

With news of a new director of advertising partnerships for pan-EMEA (Europe, Middle East and Africa), and eBay CEO John Donahoe talking up advertising growth rates during the company's recent earnings call, it seems clear eBay is very committed to growing ad revenue. An auction site as ad platform didn't work for Yahoo Auctions, can it work any better for eBay?



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by: catsfly

Thu Jan 29 20:53:15 2009

@ Marvin

Not everyone is a business. Some people just enjoyed having a ''venue'' available to make extra money, or sell our unwanted items etc.

That was easy to do on ebay because they had the traffic, AND through their in-house search, and in-house ads, they directed that traffic TO our listings, which is the service we were PAYING them for.

Not everyone has the ability or inclination to direct traffic to their own website or alternate sites; and let's face it, if ebay had never been what they WERE, you most likely wouldn't have the customer base you do, or the ability to direct them anywhere.

Okay, so ebay is *all* about corporate revenue, and they have been very successful at generating it. The problem is that they seem to have forgotten where the majority of that revenue was coming from, and WHY.
It was coming from sellers who were happy to pay for a service that worked and was profitable for them as well.

No one in their right mind, no matter how good they are at ''directing traffic'' would pay ebay for a search that HIDES items, and ADS that direct customers elsewhere.

I could no longer afford to pay ebay when my page views dropped to almost nothing. Of course you can spend your time and money directing traffic elsewhere...IF you have time and money. Many small businesses were so small, that once ebay was broken, they did not have the money to spend on advertising or the time to wait for their income to pick up again.

Whether it was right or wrong, smart or dumb, thousands put all their eggs in the ebay basket because it had been effective in the past and they ASSUMED that ebay would continue to be who they've always SAID they were, and operate as such.

It's hard to pick up the pieces when the rules change overnight, you're still paying fees to ebay, but they've backed out of their part of the bargain and as a result your sales have shriveled to nothing. Even if your sales are still profitable and pay more than your ebay fees, that is being threatened as well, by the dreaded DSRs, and suspensions, and having your listings disappear overnight, or your money held by paypal.

This latest thing with the ads....which I hadn't really noticed because I haven't bought, sold, or searched ebay in going on a year....is just WRONG.
It would be like paying a lease on a brick and mortar store and the landlord puts a sign on your door directing your customers to the business a few doors down.
Yes, it's making ebay revenue NOW, but it's just another one of those things that will eventually be the nail in ebays coffin, and prolongs their slow death by keeping profits up just enough to not set off alarm bells to the stockholders who are less informed.

Their *all* about revenue attitude would be just fine, and still be just as profitable IF it was also still profitable for THEIR customers.

It's been said a million times, but it's just so maddening....WHY did they take something that was working for EVERYONE involved, buyer/seller/ebay, and turn it upside down, inside out, to the point where it now needs to be saved by trying to make money directing traffic to Amazon!?!

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by: fromus2u

Thu Jan 29 22:25:14 2009

Yes, eBay ads cannibalize sales.  In the process, eBay shall cannibalize itself.

I was searching antique signs, and saw an eBay ad for antique signs, that lead to an off-site store of reproduction signs.  I can understand many buyers would be tempted by less expensively priced merchandise.  

Personally, I was completely offended that the eBay ad was misleading for antique signs, with no mention of reproduction.

It's a shame management continually chooses the path of most destruction.

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by: Gail

Thu Jan 29 23:15:25 2009

What ads?  I use Superadblocker, and have yet to see a single ad on eBay. It also blocks Google ads, pop-ups, dhtml, banners, and just about anything else annoying.  This particular page loads faster without the banners, too.

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by: lbrhiannon

Thu Jan 29 23:35:55 2009

Advertising? Why? Totally pointless. Their days are way over and numbered. Greed doesn't pay. Nor does vicious treatment of it's once loyal customers who all have crossed over to an extremely happy home at B O N A N Z L E  !!!!!

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by: Gus

Fri Jan 30 00:05:17 2009

I used to sell quite a lot on ebay, now hardly ever. I do drop in to shop for things I collect or for items to resell  (prices have dropped on ebay enough that I can buy there and sell locally or on my website for a profit, just the opposite that I did a few years ago). I tend to completely ignore the ads and I couldn't even tell you the name of one company banner on the pages I have looked at and I have never clicked on one. But I am on dial up and they do slow down the page downloading even more than usual.  Unless I am extra interested I just close the window and go on. That can't but hurt the sellers that pay the fees.

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by: DONSCYCLEWARE.COM

Fri Jan 30 00:10:49 2009

I'm not sure if the ads will hurt my sales or not, who knows?
One thing I do know however, is that when I stop making enough money via eBay to make the aggravation worthwhile I'm gone!
My Yahoo site: HTTP://DONSCYCLEWARE.COM has now surpassed my eBay sales and they don't have some kind of lame-brained rule change every month!

Don

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by: Fredsplace

Fri Jan 30 00:14:28 2009

All this talk about how great Bonanzle is - Yep free. no sales in 3 months with over 150 listings. No cost just time. Not crazy about ebay-however same time period with basically same listings 163 sales,- better than Bonanzle,  and amazon sales just keep growing, 4th quarter sales - Amazon surpassed ebay for the first time.. My experience is throw more effort into amazon. Ebay will be a thing of the past for small sellers trying to make a few extra bucks. YES-the ads are very frustrating. Greed brings downfall. As the saying goes all good things must come to an end. So much for ebay.

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This user has validated their user name. by: Bill

Fri Jan 30 01:25:11 2009

In my 30 plus years of having worked in many different types of business's I have seen this time again. As a matter of fact too many times since it has affected my life also during those years. I came up with a saying that is a play on words for a slogan that was popular when I was in college back in the early 70's:

GREED KILLS!

Unfortunately we are all witnessing the death of eBay, just as I have been witness to the death of many other good companies before this by squeezing the company to get every single last penny out of it, they also squeeze the life out of it at the same time.
It has happened before, it is happening now and will happen again in the future.
Some hot shot idiot gets put in charge of the company and thinks they have a better way and they end up choking the company to death.

RIP

Bill

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by: RT

Fri Jan 30 05:08:11 2009

I just ignore the ads, they are quite annoying. Are there numbers on how many sales are taken from active listings? The ones that appear after an auction is closed is of course annoying even more so but how often do buyers look at closed auctions in relation to looking for something to buy.
Gail you mentioned an ad blocker?

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by: Andrew Titcombe

Fri Jan 30 05:18:26 2009

Anywhere is a tough marketplace right now and I do feel that eBay should pay ME for adverts on the listing page that l already paid for.
HOWEVER for my company, eBay is still a good place to sell so I need to make my listings good enough to compete in this global marketplace which eBay offers. eBay adverts are not the only distraction for buyers because I compete against other eBay sellers with similar items so I need constantly to research before listings and while the sale is on.
NOW I try and list stuff that people REALLY want rather than a list-all-and-see-if-it-sells attitude. My costs have tumbled and my % sales are up. The small niche position is my strongest weapon This keeps the buyer focussed on my item long enough to put a watch on it even if he wanders off on an advert.
Someone needs to ask their own customers if they DID click on an eBay ad - eBay would not dare do that research as it might prove most people DON'T - I am a regular buyer and I never do!
I am UK based so I do benefit from a weak pound helping my sales BUT I have had the best New Year start on eBay for 3 or 4 years HOWEVER listings on other auction/sales sites have produced NO sales for me (therefore it is isn't all down to the pound) so I will be staying with eBay UK for 2009
PS I don't have to like them  as I have had direct battles over the years with eBay and its impersonal attitudes & disregard for small sellers but I will certainly use them while they help sell my stuff
In short you can't fight them so use them. I sell on other sites mainly Amazon which works well Good luck to you in 2009 and spread the risk across various sites

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by: eBay is scum

Fri Jan 30 05:25:21 2009

Did you get this ebay email - just ignore it :January 29, 2009

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by: eBay is scum, too

Fri Jan 30 05:25:57 2009

January 29, 2009

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by: eBay is scum, too

Fri Jan 30 05:36:02 2009

lets see if this post sticks:
ebay sent email to sellers inviting them to join an alert system - You must be kidding. Just ignore it.

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by: susie

Fri Jan 30 05:37:12 2009






If you do not see this graph, go to alexa.com and put in  
srx.main.ebayrtm.com

Looks like sellers lose again! Imagine that!
Glad I got their message a while back I was not wanted!

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This user has validated their user name. by: Bob

Fri Jan 30 07:27:46 2009

As an ecommerce store owner whose ads appear on eBay, let me help you all out by saying that they don't generate as many sales as if I'd simply upload my inventory of about 100,000 items to eBay.  Sure we get clicks and some sales, but not enough that it's hurting anyone too much in our categories on eBay.  eBay buyers are far different from the rest of the online world - for the most part.

I suggest you all stop whining about all the advertisements, NOW!

Why?

Because if you make enough noise and eBay does away with all those ads, what do you think they will do to increase revenue?

I'll tell you....

eBay will go to all of those advertisers with a handy dandy API that will allow smaller ecommerce stores to upload their entire catalogs (just like the Diamond PS's do) to eBay for free or next to free.  If that happens, sellers like Buy and their affect on the site will seem minimal.  The few million extra listings on the site now from DPS's will pale in comparison to the tens, if not hundreds, of millions of listings when eBay becomes another Froogle.

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by: Herb

Fri Jan 30 08:20:59 2009

Yeah, everyone move to the other sites. Hurry! I am doing record high level sales on eBay and want more. Hurry people! Move !

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by: Jonathan

Fri Jan 30 08:34:17 2009

I use Yahoo and Google pay per click advertising and on both eBay .com and .co.uk I am able to manipulate my ads so they come up on eBay and clearly provide a buyer with a reason to leave eBay and go to my website.  

My website is doing better than ever and my eBay sales are the lowest they have ever been, even lower than my first year on eBay.

eBay, management rewriting the book on how to destroy a business.  I think their long term goal is college text book printing!

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by: Ebay No More

Fri Jan 30 08:46:10 2009

Ads on Ebay's site are meant to do one thing- produce revenue for Ebay. Those same ads are not meant to promote Ebay's own sellers products nor maintain traffic on the site. Add to that fact Ebay woos diamond sellers who divert even more Ebay buyers back to the diamond sellers own websites. Take a good look at Buy.com's new user growth year to year. Those new buyers are being siphoning from Ebay's buyer base in record numbers and Ebay allows Buy to do it for free. Smart move Donahoe! Angry sellers, bored buyers, and frightened Ebay employees. This combo makes for an exciting buying experience on Ebay.

Do I care? Nope I cut strings to Ebay years ago. I just come to watch the show.

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by: Omar

Fri Jan 30 09:03:27 2009

Maybe eBay is trying to tank itself so it can apply for the "Government tit" bailout program.

Amazing, the greed still runs rampant.

A locally owned business is quite happy to continue the way it has, making a decent profit and contributing to the local economy. But a "corporation" must grow to survive [bullshit]. EBAY HAS NO DEBT and a few billion in cash lying around, but has laid off people and is trying to grow its revenue????

The corporate hubris is amazing. They are incapable of saying "We're successful, everyone is making a good buck off us, including our employees and stockholders [if they ever decide to give a divided [maybe Meg will go for that if she hasn't sold off her shares yet]], the try to re-invent themselves when there is no reason to do so.

PS - how do you think the banks and financial institutions got to where they are today.

It almost makes you want to be come a [dreaded] Communist, but they have their problems in spades - i.e. only 1 corporate boss and the politburo as the board of directors.

Sic crustulum friat!

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by: Not Rocket Science

Fri Jan 30 10:08:39 2009

It's a no-brainer that the ads take customers and sales away from the ebay base.

If those ads didn't generate sales for the off-ebay sites, the off-ebay sites would be stupid to buy them, wouldn't they?

Of course they cost ebay sellers sales.

Ebay wanted it ALL, us sellers paying them millions per day in fees and the off-ebay advertisers paying them pennies per day in fees for their PPC ads. They were stupid [as usual] to think that they could have it both ways.

Sellers are leaving, so rather than find someone with a functioning braincell or two to come up with a way to keep them or win them back, no, they resort to more ads for more pennies.

One of the first [of many] stupid changes and one of the first [of many] reasons why sellers, like me, left. Ebay simply does not get it, even as "IT" was slapping them in the face with our millions, they just don't get it.

The best description for ebay is the quote from Forest Gump:

"stupid is as stupid does"

RIP ebay.

Heeeeeellllllooooooooo www.Bonanzle.com!

(**Please note to "flame-on-screamer", I don't work for Bonanzle, but I wish I did and they paid me in futures! lol)

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