Exclusive: eBay plans to let sellers pay for placement in search results

May 26, 2015 06:54 AM

EBay Inc. in June will begin testing an ad unit that will let sellers pay for premium positioning in its search results.

The e-commerce giant plans to debut a landing page describing the new advertising tool on Tuesday (Update: The page is now live).

Retailers will be able to buy the ads using a new self-service tool to bid a percentage—ranging from 1-20%—of an item’s final purchase price to place the ads, which eBay is calling Promoted Listings. A seller will be able to select the item he wants to promote and assign an ad rate for each item he plans to promote or for a group of items. He’ll then set the campaign name and the dates he wants the campaign to run (a seller will be able to launch a campaign on the same day he creates the ad or schedule it for a future date or dates).

The ads will initially appear to shoppers on eBay’s desktop site, as well as its Apple Inc. IOS mobile apps. It will expand the ad unit to its Android apps in August.

At first, the ads will appear at the bottom of the first page of search results. But if the ads don’t appear to be intrusive to shoppers, the online marketplace will increase their prominence over the course of the test.

Based on the test’s results, eBay may begin placing Promoted Listings elsewhere on eBay.

The ads are different from eBay’s previous attempts to offer ad units that let retailers pay to promote products because they rely on so-called structured data—items that are characterized according to identifiers such as SKU—that aims to ensure they only appear on pages relevant to a product. For instance, a consumer searching for a Nikon camera will only see ads that relate to the search, such as cameras and complementary items, says Jordan Sweetnam, eBay’s vice president, seller experience.

EBay is in the midst of a transformation that reorganizes the data it gathers from sellers using structured data. The move is a “top priority” for CEO-designate Devin Wenig, who will become eBay’s CEO when the e-commerce company spins off PayPal early in the second half of the year.

The first phase of the transition will come June 29, when eBay requires sellers in 18 categories including baby, home and garden and pet supplies to include product identifiers when they list items. Those identifiers include the item’s brand, manufacturer part number and global trade item numbers, as well as universal product codes (UPCs) and international standard book numbers.

Wenig says better organizing data it gathers from sellers should help the online marketplace solve the search engine optimization problem that plagued eBay last year. EBay’s natural search results fell heavily in 2014—various media reports suggested the reason was eBay had created and optimized pages to attempt to game Google Inc.’s search rankings (neither eBay nor Google would comment on the specific details relating to the rankings)—and the problem cost the online marketplace millions in revenue.

The transition will help search engine spiders find the items on eBay, Wenig tells Internet Retailer, before stressing that the process will take time. “This is a multiyear journey,” he says. “You bite off one challenge at a time, category by category.”

The move to structured data also is a major part of Wenig’s plan to transform eBay into what he calls a “discovery-based marketplace” where value-oriented shoppers stumble upon and buy items they might not have known about or thought about buying.

“We need to show the spectrum of products on eBay and be able to show groupings of products that fit together,” he says. “We can’t do that today because we don’t understand the connections between products.”

Following the launch of its Promoted Listings test, eBay plans to test an Amazon Prime-like delivery and loyalty service called eBay+ in Germany. The service will offer consumers who pay somewhere between 15-20 euros ($16.68-$22.24) free shipping and returns, according to local press reports. (EBay confirmed plans to run a “local” test, but declined to comment on its specific details).

The eBay+ service also aims to appeal to sellers by offering them better placement in search results, discounts on selling fees and a subsidy to mitigate some shipping and returns costs.

EBay is hardly alone in taking inspiration from Inc.’s delivery and loyalty program. Wal-Mart Stores Inc. recently announced plans to test an Amazon Prime-like loyalty program that will offer online customers unlimited free shipping for $50 a year.

There’s a good reason that e-commerce companies like eBay and Wal-Mart are taking a page from Amazon, No. 1 in the Internet Retailer 2015 Top 500 Guide: Prime members are far more valuable than other shoppers. A recent study by Millward Brown Digital found that 63% of Prime members convert during their shopping sessions on Amazon. The research firm says that’s nearly five times the conversion rate of non-Prime members. It’s also far higher than the typical 3-4% conversion rate of U.S. e-retail sites in general. Moreover, Millward Brown also found “the percentage of Amazon traffic from Amazon Prime members has increased 300% in the last year.”

For much more about the direction Wenig and where he is taking eBay after it spins off PayPal, read the cover story in the June issue of Internet Retailer magazine.




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