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eBay plans cost-per-sale ad model

News, 28 May 2015

SAN JOSE, CA: eBay is planning to roll out a new model for advertising on its online marketplace whereby sellers only pay for ads when users make a purchase.

Rather than relying on cost-per-click ads to generate revenue, the new Promoted Listings service will enable sellers to bid for ads based on a flexible percentage of the final purchase price from a sale.

Ads carrying a higher specified percentage will be displayed more prominently on eBay, although the company will also take into account a product's popularity and the seller's reputation, Bloomberg reported.

This new cost-per-sale approach is designed, in part, to appeal to eBay's large base of smaller merchants, who often don't have the means to track the effectiveness of ads.

But it also will help to improve the visibility of eBay's database of products for mobile shoppers, who often find browsing difficult because of the small screen size of their mobile devices.

Starting in June, Promoted Listings will be made available to a selected number of eBay subscribers in the US, UK, Germany and Australia, but the service is likely to be extended later in the year.

Alex Linde, vice president of advertising and monetisation at eBay, said embedding Promoted Listings within a user's search facility would strengthen the company's strategy of developing more mobile-first formats for native commerce.

"We want to match the right product to the right query to the right bid and get all the way down to sale," he said in comments to AdExchanger.

In pursuit of that ambition, he said eBay's chief product officer is currently "reinventing the consumer side of our shopper experience to make it much more browsable and shoppable by considering how brand advertising and seller promotions fit in there".

Data sourced from Bloomberg, AdExchanger; additional content by Warc staff