eBay CEO Jamie Iannone told Wall Street analysts on Wednesday it would launch experiments this quarter to further monetize the site through the following new advertising models:
- Promoted Listing Ads for auctions;
- CPC ads;
- Offsite ads.
eBay Promoted Listing ads are CPA - Cost Per Acquisition. The seller doesn't pay unless an item sells, though the shopper doesn't have to buy the item right away. The CPC ads eBay is testing stands for Cost Per Click. The seller pays when a shopper clicks on the ad, regardless of whether they purchase the item.
Currently Promoted Listing Ads are available only for fixed-price listings.
One of eBay's tests is an offsite ad pilot, and although the CEO provided few details, one can look for clues by studying Etsy's offsite ad program.
Etsy explains how Offsite Ads work on this page
How Etsy's Offsite Ads Work
Etsy advertises listings throughout the web, including in search engine results, social media sites and apps, Etsy Publishing Partner sites, and Google Display Network sites. Etsy offers this service with no upfront costs to you: you only pay an advertising fee when you make a sale.
Your listings may be included in these advertisements. Etsy may at our discretion automatically advertise your listings with our partners.
Offsite ads may be optional for your shop, depending on the revenue you've made on Etsy in the past 12 months.
Etsy provides more details on the page and then explains how the fees work - sellers pay between 12% - 15% of the sale, depending on the seller's revenue over the past 12 months, but "will never exceed $100 USD, regardless of the order total for an order attributed to an Offsite Ad."
(That 12% - 15% is in addition to Etsy's commission.)
There are several reasons why some Etsy sellers object to the program. One is that it's mandatory (except for the smallest of sellers). The other: some sellers believe Etsy charges fees for sales that the seller is responsible for generating.
And sellers dislike the unpredictability of the program. As we blogged recently
, "Sellers can be going along paying Etsy 5% commissions, and suddenly they make a sale where the commission is 17%."
There's no indication of whether eBay will copy Etsy's offsite ad program wholesale, whether they may borrow features from it, or if eBay has something else entirely in mind.
If you have experience with Etsy offsite ads, let us know how well they work and whether you'd welcome a similar model for your eBay listings.
We'd also like to hear what you think about the other experiments eBay is running this quarter, which you can read more about in this EcommerceBytes Newsflash article