How eBay is attempting to overtake its promoting enterprise to be extra like Amazon and Walmart



eBay CEO Jamie Lannone Corbis via Getty Images


© Supplied by Enterprise Insider
eBay CEO Jamie Lannone Corbis through Getty Pictures

  • eBay is making a much bigger push into promoting with expertise that mimics Amazon, Walmart, and Instacart’s instruments.
  • The transfer exhibits how eBay is aggressively going after Amazon and Walmart retailers.
  • eBay is on a hiring spree for advert expertise from Amazon and elsewhere.
  • See extra tales on Insider’s enterprise web page.

EBay is making massive adjustments to its $1 billion promoting enterprise, as a result of it must win over advertisers who’re more and more shopping for advertisements from rivals like Walmart, Amazon, and Instacart.

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Many of the income from eBay’s advert enterprise comes from a unit referred to as Promoted Listings the place sellers pay eBay a share of gross sales if somebody clicks and buys a product from an advert – sometimes between 2% to 12% relying on the class, in accordance with advert purchaser sources.

However advertisers shopping for stock on retailers’ web sites and apps aren’t used to transacting based mostly on rev share. Promoted Listings drove $224 million in income throughout the second-quarter of 2021, up 8% year-over-year. However that price is down considerably from a 64% year-over-year improve throughout the first quarter. With extra rivals grappling for the cash transferring into retail media – eMarketer estimates $24 billion this yr – eBay should change its enterprise mannequin to remain aggressive.

The stakes are excessive for eBay. Like different retailers, it is betting on promoting to offset the slim margins it will get from its retail enterprise, in accordance with latest analyst notes from Wells Fargo and Evercore.

So final month, eBay quietly unveiled the primary a part of its pitch to make itself extra enticing to retail media advert patrons, with search advertisements on the web site and app that cost advertisers on a cost-per-click foundation. Price-per-click advertisements are normal on e-commerce websites like Amazon and Walmart, and are significantly standard with small and midsize companies with modest advert budgets.

“When you promote not simply on eBay however Amazon, Walmart, and different locations, that is the usual format,” mentioned Alex Kazim, who heads up eBay’s advert enterprise as VP and GM of worldwide promoting. “This makes it simpler for you as a vendor as a result of it operates kind of the identical approach.”

Kazim mentioned that eBay has examined cost-per-click advertisements with a pair thousand of sellers throughout the beta program. He declined to share common prices or the efficiency of advertisements in this system however mentioned that the items elevated retailers’ gross sales by double digits.

To assist this new enterprise mannequin, eBay went on a hiring spree this yr, poaching from massive advert platforms like Amazon and Fb.

“Constructing out a cost-per-click platform just isn’t trivial,” mentioned Kazim.

Notable hires this yr embody Elisabeth Rommel, GM of North American advertisements, previously at Amazon; Min Shi, GM of APAC and CBT advertisements, previously at Lazada Group; and Anthony Okoro, head of advertisements new ventures, previously at Fb.

The corporate remains to be hiring. It at present has 31 advertising-related roles open on its profession web site, together with a head of product administration and software program engineer.

eBay is concentrating on Amazon and Walmart sellers

The opposite problem eBay faces is getting advertisers to really purchase its cost-per-click advertisements.

The corporate recruited a handful of retail adtech corporations like Teikametrics, ChannelAdvisor, and Pacvue to promote cost-per-click advertisements on its behalf. Many of those corporations additionally assist advertisers buy advertisements on Amazon, Walmart, and Instacart. So that they have deep relationships with the Amazon and Walmart retailers that eBay covets.

However eBay additionally has to beat its repute as an auction-based market the place folks hawk used garments or previous trinkets.

Chet Butikofer, VP of innovation at Teikametrics, mentioned quite a lot of manufacturers now promote items on eBay at a hard and fast value.

“It is turn out to be a reliable vacation spot for manufacturers to promote DTC and is rather a lot bigger than folks understand,” he mentioned.

A pitch deck for eBay’s advertisements, considered by Insider, underscores how the corporate is attempting to alter the way in which it is perceived. The deck emphasizes how 56% of Amazon sellers additionally promote on eBay; 80% of products offered on eBay are new; and 88% of merchandise are offered with mounted costs.

Nonetheless, eBay’s gross merchandise quantity – a key metric traders use to measure the overall worth of products offered – final yr was $14.4 billion. To check, JPMorgan estimates that Walmart’s GMV was $439 billion whereas Amazon’s GMV was $316 billion final yr.

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