eBay Starts Keyword Advertising

  |  June 24, 2003   |  Comments

UPDATE: The online marketplace learns the lessons of the paid search, offering pay-per-click banner advertising to its army of sellers.

Online auction juggernaut eBay announced on Tuesday a new advertising program for its sellers that takes a cue from the red-hot paid search business.

"Keywords on eBay," run through Conducive's AdMarketplace, will allow eBay sellers to bid on keywords to trigger banner ads touting the seller. Keywords can be eBay categories, types of items, brand names, store names, or eBay user identifications. Minimum bids begin at 10 cents. The ad program will officially start up on Thursday.

For example, an eBay merchant selling classic furniture that bids the highest on the term "antiques" would have a banner ad displayed on the search results page anytime a user queried "antiques." The banner ad can lead to a specific item, a merchant's online store, or its "About Me" page. The merchant only pays when a user clicks on the ad.

In a related deal, San Jose, Calif.-based eBay signed a multi-year deal with DoubleClick to use its DART for Publishers hosted ad server to deliver the ads for the program. Conducive, founded by former DoubleClick employees, will handle the bidding process for determining which ad will be displayed and the creation of the graphic ad, including Flash. AdMarketplace also allows advertisers to upload their own creative.

"Search is certainly one of the most basic but elegant platforms to trigger the right type of message at the right time," said Mark Nathanson, a marketing specialist at AdMarketplace. "It's looking at something that works well [paid search] and evolving that to include the graphic and animated quality."

Advertisers can set a maximum budget for a campaign and see where their bid falls in the rotation for a particular keyword. Nathanson said the ad rotation will include more than simply the top bidder.

With as many as 150,000 people using eBay as their main place of business, the keyword-advertising program will allow eBay to cash in on the growing popularity of its online marketplace, which boasts nearly 20 million active users, and the popularity of search as a way for consumers to find products. The company estimates that its site handles 79 million item-related searches each day. A sign of its popularity is this week's eBay Live! gathering in Orlando, Fla., which is expected to draw 10,000 people to hone their eBay business acumen.

Search has become a key driver of e-commerce. According to Web analytics firm WebSideStory, up to 10 percent of all referrals to e-commerce sites come from search engines. Search destinations have sought to capitalize on that through keyword-based advertising, which uses a pay-per-click model.

The booming search market, which is forecast to reach $7 billion in 2007, has brought about efforts to bring search beyond simply search engines. News sites, from CNN.com to NYTimes.com, have all added paid listings to their search functions, while Amazon.com has led the way for e-commerce destinations, inking a deal in April to carry Google's AdWords text listings.

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