eBay showed signs of growth in July, August, and September after quarters of tepid performance. And while eBay CEO Devin Wenig said he was pleased with the quarter, he said there was still a lot of work ahead. He also issued a warning. "We recognize that making significant product changes can have a big impact on our ecosystem. We've been moving as fast as possible, while making sure we don't create disruption."
Wenig said his first priority was to nail the customer experience. He made the remarks to Wall Street analysts after company released earnings
eBay revealed its total GMV (Gross Merchandise Volume) in the third quarter was up 8% year over year (or 7% FX neutral) to $21.7 billion, while revenue was up 9% (or 8% FX-neutral) to $2.4 billion.
Its Marketplace platform (not including StubHub or Classifieds) saw year-over-year GMV growth of 9% for the third quarter on an as-reported basis and 7% on an FX-Neutral basis, driven by acceleration in the U.S. and Europe, which led to revenue growth of 8% on an as-reported basis and 7% on an FX-Neutral basis. (Read the full financial release here.)
One of the factors that could help eBay grow its revenue: seller ads, called Promoted Listings. Wenig said eBay ended Q3 with over 50 million live Promoted Listings, with over 100,000 sellers using the product."
That resulted in 45% revenue growth sequentially, he said (that means compared to the second quarter of 2017, not year-over-year).
Wenig said eBay is in the early phases of Promoted Listings - growth is rapid, but it's still small, and he reminded analysts that eBay was removing a number of its third-party ads. But, he noted, there are 100,000 sellers using it, "and we have 20 million-plus sellers" - and it's not even open to all sellers yet.
His vision is to have AI (Artificial Intelligence) optimize placement of the Promoted Listing ads. "I think what you'll see in 2018 is that we'll move off the idea of fixed landing slots and we'll move to machines placing those first-party ads dynamically" so eBay is "best-monetizing every pixel on our mobile devices and our desktops."
Wenig also said brands were important - "we're bringing brands to eBay at an accelerated pace," he said - it helps bring differentiated inventory to the Marketplace.
Partnerships like the one it recently entered into with Spring were one way to go, he said, "But most of our activity is a direct outreach to brands," who are worried about the retail landscape and who is going to sell for them. eBay is now having a very different conversation with brands that it had trouble even talking to a year ago.
"Stay tuned on that. There'll be more to say about our approach with brands in short order."
Noting that the third quarter GMV growth was the fastest growth rate in 3 years, Wenig also warned that he didn't expect growth to always be linear as he makes decision to grow long-term success, "even when that pressures short-term results."