Merchants say eBay ad programs drive buyers away

Ad deals with Google and Yahoo draw criticism from eBay sellers

EBay has significantly boosted its advertising revenue since last year, but some sellers worry that the company's efforts in this area are driving potential buyers away from the online marketplace.

Last year, eBay signed deals to run ads from the Google and Yahoo networks in order to better capitalize on the massive traffic it draws to its Web sites, primarily its core eBay.com marketplace.

The strategy seems to be working: In 2007's second quarter, ended June 30, eBay's advertising revenue almost doubled compared with the same period in 2006.

The very influential Professional eBay Sellers Alliance (PESA), a group of large eBay sellers, has been watching from the sidelines with increasing concern and skepticism.

"Having those ads on the Web site we view as very negative. Encouraging people to leave eBay can never be good for the seller who is paying to be on the marketplace," said Jonathan Garriss, PESA's executive director.

While eBay has had advertising on its Web site for years, sellers generally hadn't perceived it as a major threat, for a variety of reasons.

For instance, the advertising program that the Yahoo deal replaced in May of last year was run in-house by eBay and was designed to let eBay sellers promote their products in the marketplace. In other words, the ads didn't link outside of the eBay Web sites.

Also, whenever eBay has allowed external ads in its sites, as it did in the late 1990s and early 2000's via a deal with AOL, the ads weren't as precisely targeted as is possible with the current ad-matching technology from Google and Yahoo.

Now, with Google and Yahoo delivering ads that are contextually relevant to the eBay pages on which they run, eBay sellers feel that the barbarians aren't just at the gates, but inside the marketplace's walls, luring buyers away.

The deal with Yahoo made it the exclusive provider of pay-per-click (PPC) text ads and banner ads for eBay sites in the U.S., while the Google deal, signed a few months later in August 2006, is for PPC text ads in eBay sites internationally.

In the second quarter of 2007, eBay reported US$76 million in advertising and "other non-transaction revenue," an increase of 96 percent from the same period in 2006. An eBay spokesman acknowledged that most of that revenue came from advertising.

Making some rough calculations, Garriss believes that eBay visitors clicked about 250 million times on the Yahoo and Google ads during the second quarter. "The biggest issue is seeing ads that compete with products already on eBay," Garriss said.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Juan Carlos Perez

IDG News Service

Comments

Comments are now closed.

Most Popular Reviews

Follow Us

Best Deals on GoodGearGuide

Shopping.com

Latest News Articles

Resources

GGG Evaluation Team

Kathy Cassidy

STYLISTIC Q702

First impression on unpacking the Q702 test unit was the solid feel and clean, minimalist styling.

Anthony Grifoni

STYLISTIC Q572

For work use, Microsoft Word and Excel programs pre-installed on the device are adequate for preparing short documents.

Steph Mundell

LIFEBOOK UH574

The Fujitsu LifeBook UH574 allowed for great mobility without being obnoxiously heavy or clunky. Its twelve hours of battery life did not disappoint.

Andrew Mitsi

STYLISTIC Q702

The screen was particularly good. It is bright and visible from most angles, however heat is an issue, particularly around the Windows button on the front, and on the back where the battery housing is located.

Simon Harriott

STYLISTIC Q702

My first impression after unboxing the Q702 is that it is a nice looking unit. Styling is somewhat minimalist but very effective. The tablet part, once detached, has a nice weight, and no buttons or switches are located in awkward or intrusive positions.

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?