What is eBay Ads
The dynamics of Search
Each pixel within eBay’s vast marketplace contributes to an advertisement. The race begins the moment a listing is created, as it starts its journey upstream in the search river, vying for visibility and ultimately, that coveted click. This pixel enters a realm of perpetual competition, where success hinges on a multitude of factors: listing quality, seller feedback, historical fulfillment speeds, scarcity, and pricing, among others.
However, eBay’s Best Match algorithm, which governs search rankings, has its limitations. It isn’t fully scalable to address the diverse needs of consumers and sellers. The delicate balance of supply and demand necessitates a more agile and responsive model. Consider scenarios like the periodic introduction of new models for common electronics or the urgent need to expedite sales of outgoing stock. Additionally, emerging brands with high consumer value may remain buried beneath less enticing offerings, requiring time to establish credibility in the eyes of Best Match.
Sales velocity becomes increasingly critical, especially for larger sellers. With greater purchasing capital, they can lower acquisition costs. But how can a seller maintain a lively pace of conversions to ensure balanced store economics? That’s the challenge to tackle in this dynamic marketplace.
Meet eBay Ads
Advertising tools serve as a “propellant” which gives the otherwise typical listing a push up the stack. Sellers strategically employ ads and promotional products in a pay-to-win model, gaining a competitive edge in search results in exchange for a share of profits.
The origins of this rapidly expanding ads portfolio trace back to the early 2000s when Listing Services emerged. Back then, sellers invested in “listing enhancements” like bold titles, image frames, featured item placements, and gallery views. These enhancements came at an average cost of $0.10 to $1.50 per listing. However, the bell curve of success was finite. Over time, the structured hierarchy transformed into a pixelated palette of diverse elements, saturating the background.
Born in 2015
2015 was a pivotal year in the history of eBay Ads. After a period of experimentation with monetization models, Promoted Listings Standard (PLS) was launched as a CPS (Cost-per-Sale a.k.a Cost-per-Ad) program targeting mid-to-large entrepreneurs, merchants and brand segments. The value proposition was simple: you only pay if your item sells, offering a highly enticing and low-risk sales accelerator. By doing so, eBay had cast a hard ethical link between customer success and its own and the program set course for a tangible YoY growth.
Core value: low risk
Promoted Listings Standard (PLS) enhances your items’ visibility in search results, reaching thousands or even millions of additional shoppers. With PLS, you pay only when an item sells and the sale is attributed to the program within a 30-day window from the first “promoted” click.
The Ad Rate, derived from your marketing budget, determines your advertising cost. Sellers can adjust the Ad Rate strategically to be more or less competitive. Higher Ad Rates lead to increased visibility (impressions) for your listings. Factors like category-level competition, seasonality, and marketplace supply/demand ratios influence the Ad Rate, which currently ranges from 2% to approximately 25% of the listed price.
Within the first 3 years PLS adoption has transformed from common practice to an essential tool for ~45% of eBay sellers by the end of 2020.
From a pilot to a system
The revenue success of the early pilot had led to a call to begin assembling a portfolio of advertising products in 2017. The direction was two-fold:
- To build a unified advertising toolkit.
- To integrate the new toolkit into the fabric of selling experience.