Dive Brief:
- EBay unified organic search results with promoted listings in the first step toward showing the sponsored listings in "floating slots" on search results page. The company introduced the idea in its dynamic marketplace where promoted and unpromoted listings compete for placements in search results based on quality, conversion and possible revenue, per a blog post.
- EBay is also working to grasp the effect that showing promoted listings at the top of search results has on buyers, based on their feedback. Most sellers said promoted listings are effective at boosting visibility. EBay plans to invest in improvements to its algorithms to improve quality and relevance of promoted listings and organic search results at the top of search results, per the blog post.
- EBay is said to be in talks to sell its classified advertising business to Norwegian company Adevinta to focus on its e-commerce marketplace, The Wall Street Journal reported, citing people familiar with the matter. The estimated $8 billion sale would follow divestments of other businesses including StubHub and PayPal.
Dive Insight:
EBay is working on additional refinements to its promoted listings program after seeing 100% growth in the past couple of years, with the implementation of a unified ranking of organic search results and sponsored listings driving most of that increase. The company aims to differentiate its platform from rivals like Amazon and Etsy that have promoted listings in fixed positions, while eBay lets sellers pay an additional advertising fee to appear at a higher rank in search results. Participation in promoted listings leads to increased sales for merchants, and helps to boost customer satisfaction, according to eBay.
EBay's development of floating slots for product search results comes as e-commerce has surged during the coronavirus pandemic with restrictions on stores and the unwillingness of shoppers to visit brick-and-mortar stores. Online sales in the U.S. surged 76% to $73.2 billion in June from year earlier, per Adobe Analytics. That figure was less than the $82.5 billion for May, mostly because of seasonal factors but still signifies a major shift in spending habits.
The growth in online shopping has spurred other companies to innovate and add new services. EBay rival Amazon, as one example, last week opened its livestreaming platform to influencers, letting them earn commissions on products they sell through its e-commerce marketplace. Facebook's Instagram photo-sharing app last week officially unveiled an e-commerce hub called Instagram Shop in the U.S., with plans for a global rollout. Search giant Google last month let brands and retailers show product listings in its search results for free, instead of requiring them to pay for sponsored listings, a move that may have an effect on eBay's sellers. Marketers can expect more innovation as these companies vie for a share of consumer spending during the holiday shopping season.
Before eBay unified the ranking from promoted listings and organic search, buyers were less likely to see relevant products from their searches with some promoted listings appearing in fixed slots. By unifying the algorithms and tech stacks for promoted listings and organic search, eBay is helping sellers appear in improved in search results based on relevance, product performance, seller history and the ad rate for the item. When many sellers compete for a higher ranking, promoted listings appear at the top of search results. Promoted listings don't appear at the top of search results when there aren't enough sellers of a relevant item and ad rates aren't high.
EBay's possible sale of its classified advertising unit follows earlier reports that the company had been looking for a buyer. The classifieds business is mostly focused in markets outside the U.S. such as Canada, Europe, Africa, Australia and Mexico. The business lets people buy ads for goods and services in local communities, a service comparable to Craigslist. EBay's classified ads unit generated $1.1 billion in revenue last year, compared with $7.6 billion for its e-commerce marketplace, the Journal reported.
