Investor day slides show eBay’s plan to double ad revenue
- An eBay executive outlined the company’s advertising ambitions at its March 10 Investor Day.
- The e-commerce company plans to roll out an ad format for brands to drive traffic to virtual storefronts.
- Advertising is a booming area for competitors from eBay, Amazon and Walmart.
EBay wants a bigger slice of the growing amount of ad dollars going to retailers.
Alex Kazim, who heads eBay’s global advertising business, detailed the company’s advertising strategy at its March 10 Investor Day. He said eBay wants to make advertising a $2 billion business by 2025, up from $1 billion in 2021. He hopes advertising will eventually make up 3% of all transactions on its platform.
The $2 billion goal would put eBay’s ad revenue on par with Walmart’s $2.1 billion reported in 2021. Target recently said it had $1 billion in ad business, and Amazon earned $31 billion from ads in 2021.
Kazim talked about new and upcoming products that will help eBay achieve its goal.
Although eBay has long had an advertising business that sellers use to promote their listings, it has beefed up its tools over the past year to keep pace with similar tools offered by Amazon and Walmart. EBay’s key listing format, Promoted Listings Standard, charges sellers a fee based on a percentage of sales.
“The success of sponsored ads has allowed us to reduce our reliance on legacy third-party ads that drive shoppers off the site,” Kazim said, adding that the ad format generated $800 million in revenue in 2021.
Last year, eBay rolled out an advertising format called Promoted Listings Advanced that uses the common cost-per-click pricing model used by Amazon, Walmart and other digital advertisements.
Kazim said this format is for large eBay merchants who want more control over how ads are targeted. It is also more visible than standard sponsored ads because it appears at the top of search results.
Over the next few quarters, he said eBay will add more automation products for advertisers.
EBay sees potential with another advertising format launched in November called Promoted Listings Express, which promotes products sold at auction rather than at fixed prices. Kazim shared some early results from the ad format and said eBay plans to introduce the ability to target these ads based on keyword searches.
eBay also buys inventory, like Google search ads, outside of eBay properties to drive traffic for sellers. Kazim said these ads drive 10% of eBay’s traffic.
EBay will launch an advertising product for large merchants to promote their virtual stores, which are similar to branded storefronts on Amazon.