Ebay vs Google: The Fallout

21 Jun

Scot Wingo, my boss and all around good guy, is probably the guy most closely associated with, and most knowledgeable about, Ebay (outside of people within Ebay itself). Ebay is not my thing. C’est la vie.  So when Scot writes about the economics of Ebay, he has a ton of data behind his pronouncements. Scot Wingo writes about the Ebay Live, Google Party, pulled adspend fiasco of last week. An excerpt:

“…we have had reports from about 10% of our top-sellers (100/1000) that they saw a material 20%+ drop in sales the day eBay stopped buying Adwords last week.  We’ve gone in and verified that this is indeed the case.  What’s interesting is these businesses typically share several things in common:

  • They are in “practicals” categories (non-collectibles)
  • They tend to have a higher fixed-price component than auction
  • They are concentrated in long-tail style businesses (lots of skus vs. narrow skus) such as sporting goods, BMV, some auto-parts and apparel.

Interestingly when we look at our overall GMV, there are enough sellers that came up during the same time that it washed out overall. (For example, consumer-electronic businesses did well in the week).

Taking these datapoints, it supports my thesis that eBay supplemented the loss of google traffic with some less-specific/targeted/long-tail traffic (probably banners) and that lifted the tide of the overall eBay ocean, but there were definitely areas that suffered a low-tide effect from the AdWord “test”.  ”

For the whole article hit the link!

http://ebaystrategies.blogs.com/ebay_strategies/2007/06/faq_what_was_th_1.html

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