eBay search results now start with five sponsored product ads. The company has recently adjusted the mix of promoted and non-promoted listings at the top of search results, which previously rarely had ads. The default search page format has 48 listings plus an additional 13 sponsored listings.
For example, the search below is for “airpods.” The first five results are sponsored placements that appear as search results for affordable Apple AirPods knockoffs. The next three organic results are genuine products from Apple. Apple itself doesn’t sell on eBay, and thus, just like most brands, it is not defensively buying ads for its products. Instead, these ads are purchased by sellers hoping to offer a cheaper yet lookalike alternative.
In May 2015, eBay introduced promoted listings allowing sellers to bid a percentage of the item price to increase the visibility of the product. The service has already generated $257 million in additional revenue for the company in the first three quarters of this year. eBay said that more than one million sellers used the service in the third quarter to promote 300 million listings. The number of sellers using the service has increased twenty times since 50,000 sellers used it in the third quarter of 2017.
Most ad rates trend around 5-10% in the US. “airpods” is in the Cell Phones & Accessories category where sellers, on average, bid 10.31% of the item’s sale price. However, sellers are not charged until a buyer clicks on a promoted listing and purchases the advertised item within 30 days.
|Category||Average ad rate|
|Jewelry & Watches||10.61%|
|Cell Phones & Accessories||10.31%|
|Gift Cards & Coupons||10.15%|
|Sports Mem, Cards & Fan Shop||8.92%|
|Tickets & Experiences||8.81%|
|Clothing, Shoes & Accessories||7.96%|
|Dolls & Bears||6.17%|
|Computers/Tablets & Networking||6.13%|
|Pottery & Glass||6.13%|
|Health & Beauty||6.07%|
|Home & Garden||5.85%|
|Toys & Hobbies||5.63%|
|DVDs & Movies||5.60%|
|Business & Industrial||5.43%|
|Cameras & Photo||5.38%|
|Musical Instruments & Gear||5.22%|
|Video Games & Consoles||5.18%|
|Coins & Paper Money||4.78%|
The number of items sold on eBay hasn’t grown since the first quarter of 2018 and turned negative to -3% in the third quarter of this year. However, the company continues to increase the transaction take rate and, thus, its revenue. Putting more promoted listings in search is going to keep that trend.
By putting sponsored products as first results in search, eBay has made them a requirement for sellers since they can no longer rely on organic ranking. While in some searches, organic results still appear as one of the first five results, for most searches tested, this is no longer the case. Other marketplaces are following a similar trend, over time increasing advertising in search - for example, in September, Amazon updated the sponsored product ads layout to start with three ads instead of two. And Etsy search results begin with four ads.
eBay has seemingly struggled the most to make its search return the most relevant products. Last year, Devin Wenig, now eBay ex-CEO said, “Nobody wants to go through 10,000 iPhones. Show me the four best options.” In late 2017 eBay rolled out grouped listings feature, which would group listings into products, not unlike an Amazon product page having multiple sellers. The idea was to make this the default experience. Those plans appear to have been walked back, searching “iphone” on eBay returns over 100,000 results. But now also with more ads.