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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.
Even the insides of your eyelids. Chu Chi has seen it. It must be done.
If you mod me down, I shall become more powerful than you could possibly imagine.
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?
Open in new tab.
Problem solved!
eBay, feel free to send me a few millions as a reward. KTHXbye.
You can't take the sky from me...
I just added a new eBay account last night, and when setting my user preferences I noticed two settings for targeted ads from ebay. I opted out of each option in one second.
Sorry to hear this is bothering multitudes of people --- but it is REALLY SIMPLE to disable.
This is a PEBKAC problem with eBay options.
Auctions? eBay still has auctions?
Maybe, but only if you consider (Reserved Price = $1.99), (Buy It Now ® price = $1.99), (shipping = $17.99) to be an "auction".
Have you been touched by his noodly appendage?
These tend to be people who will pay more for used items than the item costs new. So, yeah.
There are basically two good reasons to go to an auction instead of a regular internet store:
1. The item you desire is hard to find and you can not find a regular internet store that sells it. This is one of the reasons why art and antiques are often sold at auction. Also what happens when a hot toy (Wii, PSP, etc.) comes out in limited quantities. Typically what happens here is that the seller puts in a minimum price, which is often more expensive than a fair price would be if the item was in reasonable supply (see Wii, etc. early sales). Here you are willing to pay more money because you can not find it on a regular store.
2. You wish to save money and believe the auction site will sell it to you for cheaper.
Now, stop and think about the ads. Let's do issue #2 first. If the guy is trying to save money, then unless he was an idiot, he already checked the commercial sites and is NOT interested in them. He will NOT look at the ads and will NOT click on them. He has already seen them and wants to get it for cheaper. So it is a non-issue for them. Also, the very nature of the fact that it IS being advertised means Issue #1 is NOT PRESENT. Chances are you could have found the item easily enough by doing a google search anyway, because hey, it was being heavily ADVERTISED, by the same people that run internet searches.
So the ebay auction sellers that are upset because they are losing people were in fact ripping them off. They were trying to sell things for MORE than they were worth by using an auction instead of trying to get a fair price. They were falsely trying to pretend the item was in short supply when it was not.
Was it illegal? No. Unethical? Well, let's say it is on the shadier side of the street.
The only time they ever lose a sale is if the buyer was a moron and they were trying to get this idiot to pay more from them for more than the item was worth. Sorry people, Ebay is NOT in the business to help you rip off fools. They are as much out their to help the buyers as to help the sellers, and you are basically complaining about ebay being fair to the buyers.
excitingthingstodo.blogspot.com
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.
One would think that a better competitor without many of the above problems could come along and steal eBay's business. What was once innovative with them has become old, rigid, formalized, and preying too often on some of their best sellers. Don't think that an alternative can't come along.
"It's the height of ridiculousness to say for those 9 lines you get hundreds of millions."
They're a public company, and it is not sufficient for them to simply make profits. They must actually grow those profits.
Google has the same problem. Having achieved domination of their main market, now what? There's a temptation to enter new markets, but the main market is so good that all the other product lines are less profitable.
The classic answer is to stop growing and pay dividends. Utility companies and railroads used to do that for decade after decade, once they'd maxed out their industry in their area. But a company that pays dividends and doesn't grow is valued by the market like a bond; the market cap is about 20x the dividend. Google currently has a P/E of 52, and doesn't pay dividends at all. eBay has a P/E of 39, and no dividends. Plus, dividends are taxed twice, once when the company pays them and once as income to the recipient.
The modern answer is merger and acquisition activity. Most M&A activity is a lose for shareholders, although a big win for management. eBay's is generally considered to have paid far too much for Skype. Then there's buying back stock, which, again, is overall a lose for shareholders, but a win for management with stock options. Stock buybacks don't usually shrink the float; they just compensate for the dilution of options issued.
They can't be more stupid than eBay when it comes to advertising. A couple of years ago, I tried googling my name and a co-worker's name. For both, there was a sponsored link to eBay with the caption 'buy {name}! Get {name} on eBay!' Sadly, there wasn't one of me on sale, and so I had to finish work for myself.
I am TheRaven on Soylent News
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.
Off-topic, but this is the reason I never click on flash ads. Since flash does not respect command-click to open in a new tab, I never know where the link will open, and so I simply don't click. While I occasionally click on plain text ads to see if they are actually offering a good deal, flash ones are simply ignored.
I am TheRaven on Soylent News
You have quite well summed up my sentiments regarding eBay. You should tweak it a bit and start a petition and send it to the morons who run the company.
Like you I am a logn time eBay user, but less and less all the time. As a seller it has become painful to keep up with all the changes (and bugs) they introduce. One particular bug kept charging customers 9.65 for insurance even though I had no insurance amount typed in. It came from some older listing where I saved the listing for a template. The bloat of pages is making it less usable for a person on a slow connection.
I feel, too, the usability has declined from a buyer standpoint. The searches keep coming up with recommended things like (for some definition of "like") what I'm searching for. I have to login when i want to look up what something sold for (why, so they can track what I'm looking for and point out next time who is all selling it so I can buy it? Sometimes I want some idea what an item sells for to decided if I want to sell one, not to buy it.)
As a buyer and a seller research is often necessary. I search to see what same or similar things have sold for to determine what price range I can expect. The concept of Private feedback is completely sick, I can see who uses Private and steer clear of them as sellers. I don't particularly like these people as buyers, either and wish to have the ability to block certain types of bidders. Further the difficulty one encounters trying to find why some seller or buyer has negative feedback is quite a bother, why? To what purpose do you shield bad news about people if you're going to keep it anyway?
Lastly, I really wish I could screen specific sellers. If I'm looking for a telescope I don't want to see anything from Taximarket -- nothing personal, but they're catering to the low end of the market and flood the listings with GREEN, SILVER, BLUE, whatever colour telescopes they have. I'd like to scan for telescopes without seeing all their offerings because nothing they have I want. This can be carried over to sporting goods and other categories where a lot of inexpensive Chinese commodity goods or knock offs are listing.
Ebay is rapidly becoming as seedy as many of the flea markets I've visited. There is good stuff there, but there's so much chaff to filter through. If their profitability is hinging upon maximising listings they may find bidders give up and go to other sites because they are fed up with sifting through too many listings to find what they want.
A feeling of having made the same mistake before: Deja Foobar
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.
With names like Viagra von Penis Enlarger and Porn McWeight-Loss, you and your coworker should have seen it coming!
I had that same experience once, looking for the phrase, "nigerian scam". It brought up this convenient advertisement:
I found that "419 scam" also displayed one of the ads, but "advance fee fraud" did not. And when I searched for "random stuff," eBay claimed they had that too!