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eBay Sellers Seething Over Targeted Ads
hoagiecat writes "eBay isn't just an enormous auction site; it's also a publisher of Google and Yahoo targeted ads, which earn eBay money every time a user clicks on them. But those clicks take users to a new page, and lead them away from the auctions — and those who make their living from those auctions are starting to get upset. Is eBay doing the right thing to make some extra cash from the hot advertising market? Or are they cannibalizing their income and hurting the sellers who have been the backbone of their business?"
Here's how I see it, as a long time EBay user — almost since day one. EBay has a huge problem: They're a public company, and it is not sufficient for them to simply make profits. They must actually grow those profits. This means that no matter how good a model they have — and make no mistake, initially, they had an excellent model — they have to continue to tweak it and push it in search of new and increased income.
Inevitably, this has lead into areas where the original "goodness" of the model is reduced. As long as profits keep rising, this isn't going to be a sensitive point for EBay, and unfortunately for the current crop of EBay users at any one time, this means that the things they liked about EBay are quite likely to evolve into something else.
A website like EBay will never be well served by the "we must make MORE profit" model. The best (IMHO) model is one of a software package that never removes or changes a previously existing feature, or moves it. Instead, they add new features, and generally speaking, these are added in ways that don't disturb access to the old features. In this way, the comfort zone of the existing user base is maintained, while the product remains able to grow.
EBay violates this process constantly, from changing the actual usability of the site, the features available, the rules that underly the selling and buying process, the operation (and therefore validity) of the reputation system, the ability for, and encouragement of, users to communicate with one another directly (without EBay acting as an intermediary), by acting as a mommy figure for various types of transactions it considers immoral, by moving and essentially hiding functionality, by being subsumed by the IRS into a monitoring venue for taxation (not much choice there, in that case, success brought on the problem and you can always count on our legislators to mine everything they can think of for income), by loading the pages with ads, by implementing no-click / not requested by the user pop-up technologies, by consistently escalating fees, by changing developer API's rather than extending them, and so on and so forth.
From where I sit, EBay was a great idea that has come and gone. When it started, I used it constantly. Today, I rarely buy, and I am even less likely to sell. It isn't a financial issue; I am well able to participate. It is a sense that the site simply isn't what it used to be, a friendly, open confluence of people all over the country. It just feels like a big, cold commercial operation to me. And I can get that feeling at Wal-Mart.
The answer to the question of if EBay is doing "the right thing" with regard to advertising varies in a polar manner depending on what you're looking at. From the stockholder perspective, the question is simply, does it result in increased income, and surely the answer will be yes. From the user perspective, the question is, does it result in increased usability and the ability to get done what one goes to the site to get done — and I think the answer to that is just as surely a resounding no. But EBay is a company; you know as well as I do what drives them, and it isn't the end user's general feelings of disaffection. They have a continuous supply of new users who have no sense of what the site used to be like, who simply want to "sell stuff", and that'll no doubt fill the holes left by those who brought the site its previous success.
I've fallen off your lawn, and I can't get up.
Is this anything like a shopping mall advertising its stores inside of its other stores, a la Dillard's jewelry ads in the JC Penny jewelry section?
There's nothing so good that it can't be ruined by advertising.
Have you been touched by his noodly appendage?
If I am trying to see what my maximum bid should be and I follow a targeted ad which shows me a retailer selling that same item for $50 with $5 shippping, then I know the total of maximum bid and seller's shipping should be less than $55. If the seller does not like this, they should be sure they can compete. If the ad were to get in the way of my viewing the auction, then I'd complain.
but the auction page is the sellers AD that they PAY FOR!!! Ebay has lots of other space to advertise on, but the auction page "belongs" to the seller. Another poster mentioned a mall selling ads inside competing stores..that they rent to sell stuff. How is this different?
I think ebay loses out on this too, since I don't believe that they profit from the shipping fees amount (it's an expense). You can report sellers for unusually high-shipping, but the reports tool - like much of ebay these days - seems more or less useless as any auctions I've reported (keyword spamming, deliberate inserted in wrong section to gain more hits, overpriced shipping) don't seem to get the sellers or even the auctions in question knocked off. One would think that ebay would realize that these things == lose profit for them, but I guess it hasn't shown on their bottom line yet.
My big problem at the moment is with sellers who indicate shipping at price X (which seems vaguely reasonable), for example $15. Then, the item arrives in a $1 bubble-padded envelope and the seller pockets the rest. It especially pisses me off because I've had auctions wherein I underestimated the shipping when selling (winner in a far corner of the country that costs more than my blanket price) and lost cash on that, while almost every seller I see is taking in 40% of the shipping price as profit while skimping on the actual delivery.
Overrated Moderation: This posts sucks... because.
ebay sellers are complaining because ads are taking their customers away? There's a word for those ads: it's *competition*.
You want to keep your customers? Then you've got to compete on convenience, price, or with items not available through regular retail channels. I've seen lots of things on eBay for about the same price as in the store. Maybe this won't be as common now.
If eBay's advertisements are enabling competition and more choices, then it's better for the consumer, which includes me.
E-Bay auction services have been lauded from the beginning as approximating as nearly as possible a perfectly competitive market. Competition, keep in mind, at least in the American model, is not for the benefit of sellers and suppliers, but rather is to the benefit of consumers, maximizing consumer surplus by creating price competition. To the extent that Google ads increase this competition, they realize the end that made E-Bay so great in the first place. Presumably, to whatever extent Google ads do drive people away from E-Bay auctions it is because they are not competitive, and this is a good thing for consumers and for the market.
The only thing that really cuts against this is that ads could be misleading or customers could be distracted from finding a competitive auction. On the first point, however, there are already laws that address that problem. And on the second, the auction model itself assumes the existence of personal responsibility enough that we shouldn't have to be paternalistic about people getting distracting and not looking out for themselves. Finally, to whatever extent someone forgoes a competitive auction for a higher fixed price through an ad, that can be explained by the consumer's preference for immediacy or for saving time, both of which are legitimate preferences.
In the last few years I have rarely been able to find products I am shopping for at less than retail prices on eBay unless they are damaged. The only reason I would even look on eBay anymore is if I was desperate to find something that was unavailable through other channels.
~ I am logged on, therefore I am.
I think this is highly dependent on the point of view. Who is "they". The company? The owners? Are the owners the company, or not?
My view is this: As soon as you can sue the investors instead of the company when the company does something bad, the investors can get their dividends tax-free, since the investors would have paid it already on their income from their share of the company. But as long as they have created a pseudo-person in the form of a corporation to protect themselves from the company's actions, that pseudo-person has to pay it's own taxes.
If the investors don't want to be taxed in addition to the company being taxed, they need to personally accept all responsibility (including possible jail time and fines) for what the company does.