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?"

It isnt' a simple question

[fyngyrz (762201)]

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.

All surfaces and links will become advertising.

[Gary W. Longsine (124661)]

Even the insides of your eyelids. Chu Chi [youtube.com] has seen it. It must be done.

Re:All surfaces and links will become advertising.

[An ominous Cow art (320322)]

There's nothing so good that it can't be ruined by advertising.

Re:

[Cpt_Kirks (37296)]

These tend to be people who will pay more for used items than the item costs new. So, yeah.

Re:You gotta ask the Ebay users.

[TheRaven64 (641858)]

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.

Re:You gotta ask the Ebay users.

[courtarro (786894)]

With names like Viagra von Penis Enlarger and Porn McWeight-Loss, you and your coworker should have seen it coming!

Random Ads

[Kelson (129150)]

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!'

I had that same experience [hyperborea.org] once, looking for the phrase, "nigerian scam". It brought up this convenient advertisement:

Nigerian Scam
Looking for Nigerian Scam?
Find exactly what you want today.
www.eBay.com

I found that "419 scam" also displayed one of the ads, but "advance fee fraud" did not. And when I searched for "random stuff," eBa

Competition is GOOD

[StCredZero (169093)]

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.

Re:Competition is GOOD

[SL Baur (19540)]

ebay sellers are complaining because ads are taking their customers away? There's a word for those ads: it's *competition*.

Um, without those sellers, EBay doesn't have a web site. It doesn't seem wise to me to alienate the core of your business.

Re:

[kenf (75431)]

So, what will be the next thing to take eBay's place?

I remember other auction sites years ago, that were put out of business when eBay came along and did it better.

Craigslist

[timeOday (582209)]

So, what will be the next thing to take eBay's place?

Craigslist. They're already dominating want ads, which is similar enough to auctions that craigslist could stand a chance of solving the main problem - that ebay has all the users, and thus benefits from the network effect [wikipedia.org]. In order to displace ebay, a challenger will have to be more than just a little better, they'll have to blow ebay away, and somehow bootstrap a big enough user base to be viable. Since craigslist actually runs its service to maxim

Re:

[Damvan (824570)]

The last five times I emailed someone on Craigslist about an item they had for sale, the response was to go look at the Ebay auction for the item. Craigslist has become a method for people to advertise their ebay auctions, not actually sell the item directly. In all five cases, the auction was posted before the craiglist ad.

Re:

[timeOday (582209)]

I've not had that experience yet, but then the only things I've bought on craigslist have been items that are hard to ship (a used TV and a used bicycle). It sounds like Craigslist needs a requirement that all items advertised must be available for immediate pickup. Craigslist should definitely avoid becoming merely a redundant front-end for ebay.

Re:

[puck01 (207782)]

I've noticed people doing this, although I can't say I've had it happen on an item I was interested in. If I remember, it is against the terms of service of craigslist to do this. As with the ads I've noticed doing this, I just click on the 'spam' or 'prohibited' tag. I'm not sure there is much else you can do short of contacting CL directly.

Re:It isnt' a simple question

[op12 (830015)]

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.

I think that feeling comes from the fact that you can't search anything without getting a ton of results from stores setup specifically to sell on eBay. There used to just be a handful of these results and then the rest were individuals, but nowadays you just get tons of powersellers and not a lot of the individuals.

That and I think it has become an increasing problem of people getting defrauded and scammed that has caused people to lose faith in the system. You can find hundreds of eBay and Paypal horror stories on people receiving empty boxes, boxes with other things inside, unable to cancel fradulent transactions without jumping through hoops, etc.

Re:It isnt' a simple question

[speaker of the truth (1112181)]

You can find hundreds of eBay and Paypal horror stories on people receiving empty boxes, boxes with other things inside, unable to cancel fradulent transactions without jumping through hoops, etc.

This is why I only buy from a handful of sites (Amazon, Fictionwise). I simply don't trust the internet enough to buy from too many sources, and I've never bought from Ebay. Not only do I prefer to buy stuff for slightly more money and possibly much better condition, you never know when someone will send you a bad product.

Re:It isnt' a simple question

[miskatonic alumnus (668722)]

I don't go to Ebay to save $1 on something I can buy at Target or Amazon. I go there to buy things that aren't for sale locally or online. There's no other realistic choice if I want those things.

Re:It isnt' a simple question

[AK Marc (707885)]

That makes me think of search terms I want. I only want to see things from people who have been members for more than a year and average less than one sale per day (or one sale a week, or whatever). Don't give me the places that sell 10,000 cell phone covers that also sell the charger I want. Just give me the links to people that are people. I have found that stores are easier to do returns with (based on conversations with people doing returns with people and stores), but I've never had to do a return with a actual human. Individuals don't buy 500+ games from an auction and sell them individually when many are scratched-up former rentals (and if they did, they'd not show up in my search). The individuals played the game and are selling it in a working condition. Stores are better at resolving problems because they are used to causing problems.

Oh, and I'd end the feedback blackmail. Count all non-feedback as neutral. But if I'm a buyer and I get screwed, I have the choice of giving bad feedback to warn others (in which case I get retalatory bad feedback, no matter what I did), leaving no feeedback and getting no feedback, or leaving positive feedback and getting posiive feedback. I have no option to leave negative feedback without getting penalized. Though, I haven't had a transaction since the new non-feedback comments can be left.

It is features like that so skewed to protect the sellers and screw the buyer that it's no longer a site I would buy from if I can find the item anywhere else. And they push paypal, and paypal sucks worse.

Re:It isnt' a simple question

[hansamurai (907719)]

boxes with other things inside

http://www.xkcd.com/325/ [xkcd.com]

Re:It isnt' a simple question

[Aladrin (926209)]

The WalMart reference is apt, since you have the same basic reason to shop there: It's cheaper and/or they have things nobody else does. (The latter reason applies to all stores, though.)

I only buy on EBay when I can get the item at a significant discount, or I can't find the item at any reputable dealer. At that point, it's worth the potential hassle of having to complain to get your product or money back. And if I get my money back, I -still- have to go find a seller for the product.

It has to be significantly cheaper because of the time I have ot invest for every item I buy on EBay. After having an issue with a seller (who eventually DID send the phone, but with a picture of himself flicking me a bird and scratches) I now have to do more than just glance at the seller's rep. I -always- read through their negative feedback and see if A) it was deserved B) if they responded and C) if the response was friendly and correct.

On top of that, I have to be careful to read the auction several times to make sure it isn't a cardboard cutout of item X or a display model or damaged, and that the item is exactly the same as I have been researching elsewhere. Model numbers, part numbers, clones... Most auctions provide all the info, but you have to be very careful not to assume anything. Yes, I got burned on that once, too. I admitted my mistake and whatever the item turned out to be (I've forgotten since it was only a few dollars) is in a box somewhere.

Returns! They cost money on EBay. The seller isn't going to pay to have it shipped back, that's your money that's going to disappear. In some cases, that might cost as much as the product did. Driving to WalMart costs gas, but not nearly so much as shipping something back to China.

I still use EBay, but since the prices are generally not significantly less than retail any more, I mainly use it for items that aren't sold at any store that I recognize as reputable. Things like European phones (because they don't need to be unlocked), odd video game accessories (Why doesn't Nintendo sell a charging cradle for the ds lite?) and other such things.

Now & Later

[Chmcginn (201645)]

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.

But there's two different shareholders perspectives. The long-term & the short-term. While putting more ads might make them more money this quarter, if it truly does alienate users, in the long run, it's going to kill their profits. The new users might not know what it used to be like, but if it doesn't result in sales, it's not going to get used.

Re:

[krbvroc1 (725200)]

But there's two different shareholders perspectives. The long-term & the short-term.

IMO, the long-term vision shareholders are a minority in this country so the short-term thinking ones are the ones calling the shots, driving many of the analysts, and overall destroying our capitalist system.

Re:Now & Later

[gstoddart (321705)]

But there's two different shareholders perspectives. The long-term & the short-term. While putting more ads might make them more money this quarter, if it truly does alienate users, in the long run, it's going to kill their profits.

You make an excellent point.

However, from what I've been able to see over the last bunch of years ... almost all businesses are looking to maximize profits for this quarter, and they don't have any real clear long-term plan. At least, large, publicly traded companies -- I suspect when the owner still runs the business you see a little longer view.

Executives get their bonuses now, which is what they want. The reality is, IMO, that so many companies do things which clearly haven't considered long-term profits and the value of corporate good will that one wonders if they even pretend to care any more. Certainly, by the time you've off-shored some of your core business, you no longer really control it as much as you once did. In the long run, some companies are losing profits and the ability to compete because they've cannibalized operations in terms of short term gains. But, by the time it becomes apparent, you no longer have the ability to bring it back under your control.

By the time the shareholders of the time (there are no long term investors any more) figure out you have screwed up the company, your options have vested, and your golden parachute has taken effect, and you may be gone.

A very large amount of North American companies have relied on globalization to give themselves improved profits. Now, they find themselves at the mercy of foreign markets (eg China) and absolutely no ability to take back any of their core businesses. They've gutted themselves, they just haven't figured out it was a fatal wound yet. :-P

Cheers

Re:

[olddotter (638430)]

If you believe that Google links on ebay will take buys away from the auctions, then this is a bad move for both Ebay and their sellers. Ebay makes more money from an auction closing with a winning bid than they are going to get from Google ads.

If the ads cut sells, then Ebay will lose more money than they gain.

Re:

[oliderid (710055)]

From the stockholder perspective, the question is simply, does it result in increased income, and surely the answer will be yes.

It really depends of the stockholder you are. If you are merely speculating then yes, it doesk make sense. If you are investing in Ebay as a long term stockholder...They are destroying values. They are alienating their core customers : pro/semi pro resellers.

If I sell a Nokia mobile phone, I do want to be alone selling it on my product's page. Can you imagine an competitor's adver

Google has the same problem

[Animats (122034)]

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.

Re:

[vertinox (846076)]

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.

Thats the problem with the public company system. In so much they can't see the forest for

Re:

[ivan256 (17499)]

They're a public company, and it is not sufficient for them to simply make profits. They must actually grow those profits.

That's not technically true. They could pay dividends on their stock to make the value of the stock the payout of dividends, rather than increasing stock price...

Or they could use their profits to gradually buy back their stock, since they have accomplished what they wanted to with the investment capital to the mutual benefit of the company and the investors.

Bad analogy

[T-Bone-T (1048702)]

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?

Re:

[mabhatter654 (561290)]

that's exactly what it's like. The seller pays for that page as their "space" on ebay. Adding targeted ads for the same product is exactly what you describe above.

target="_blank"

[Scrameustache (459504)]

Open in new tab.

Problem solved!
eBay, feel free to send me a few millions as a reward. KTHXbye.

Re:

[davidsyes (765062)]

Seriously, though, eBay should modify the page so that the ad is popped up AFTER the user submits a bid, or if the user decides not to bid, then present the ad. Maybe these ads should be triggered or presented only AFTER the bidder/prospective bidder drills down to a certain depth in the bid. Ad sponsors won't like it, but hey, this DO have placement, which they might not have had previously. So, they still get their "impressions" made.

But, the UI should first tell the bidder/prospective bidder that a numbe

You can disable it in user preferences!

[kad77 (805601)]

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.

Re:

[arivanov (12034)]

Err... For whom? For the seller or for the buyer?

Re:You can disable it in user preferences!

[argmanah (616458)]

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.

You missed the point. The sellers are complaining that by default, this stuff is turned on for the people buying, taking away their business. They aren't bothered by the fact that the ads are on their screen, they are bothered by the fact that the ads hurt business, and since they are paying e-bay to serve as their conduit, e-bay's actions create a conflict of interest.

Auctions?

[Waffle Iron (339739)]

But those clicks take users to a new page, and lead them away from the auctions

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".

The shipping thing is a big deal

[phorm (591458)]

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.

Those sellers that complain are crooked.

[gurps_npc (621217)]

Look not every thins SHOULD be sold by auction.

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.

Re:

[moderatorrater (1095745)]

Also remember the other things that ads can do. For example, were I to buy an XBox 360 on ebay, one of the text ads could lead me to a site that sells accessories and games that I'd want. It's a win win at that point.

Re:

[mabhatter654 (561290)]

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?

It can be a service to the buyer

[wherrera (235520)]

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.

Re:

[Lord Bitman (95493)]

Agreed. If Sellers are getting hurt by this, it's because the sellers are charging too much or expecting too much.
If I'm on eBay and see an ad for something at the same price or lower than what I'd expect to pay on eBay, I will go to the non-eBay site. 100% of the time.

Re:

[mabhatter654 (561290)]

So I can go to Best Buy and pass out Walmart ads next to the items being sold... right...

Don't like it?

[Colin Smith (2679)]

Switch to an alternative. QXL, Ebid, CQout etc.
 

Who cares?

[Ctrl-Z (28806)]

I didn't even know that eBay had targeted ads now, but who cares? It's not like people have any other auction site to go to. Sure, sellers can complain that people are sent away by ads, but if the auction is good, the buyers will return.

If You Don't Like eBay

[Nom du Keyboard (633989)]

If you don't like eBay's policies, the way they take down legal items too far quickly when certain large companies complain, the way they revoke accounts with no legal backing for it, the way they only accept PayPal for electronic payment, their ever higher fees, the difficulty in getting help from them, the way they won't even list some legal items (e.g. concert tickets), the way...

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.

What ads?

[maiden_taiwan (516943)]

I wonder if this is a non-issue. I've been using eBay for years and honestly, I haven't noticed the ads. Literally. If you'd asked me earlier today if eBay has these ads, I'd have said no.

eBay prices are = retail

[riceboy50 (631755)]

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.

Re:

[speaker of the truth (1112181)]

I'm finding I'm more inclined to click on ads served locally or served by small ad "companies" that specialize in particular topics. I only ever click on Google Ads by accident.

Re:

[TheRaven64 (641858)]

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.