A little more than a month after eBay Inc. announced plans to restructure its business, the online marketplace announced that on May 1 it will shutter eBay Commerce Network, its third-party advertising network that enables merchants to advertise their products on non-eBay sites.
EBay Commerce Network evolved out of eBay’s 2005 purchase of comparison-shopping engine Shopping.com. Eight years after the deal, the online marketplace created an ad network around Shopping.com, which it dubbed eBay Commerce Network. It then remade Shopping.com into a publisher that was part of the eBay Commerce Network. Now that eBay plans to close down the ad network, it will park the Shopping.com domain while it evaluates various options, says Bridget Davies, the online marketplace’s vice president of advertising.
EBay will issue refunds to merchants that had any balance remaining in their accounts, as well as pay out any balances to publishers by June 1.
The move is part of a broader strategic shift to refocus eBay’s advertising business on driving sales on its platform, rather than on other merchants’ sites and apps, Davies says. EBay initially mapped out the shift in March 2017, which coincided with its announcement that it was building a direct ad sales team.
“This is part of a multiyear effort to transform our ad business,” she says.
EBay is focused on bolstering its other advertising offerings that include eBay Partner Network, which is eBay’s affiliate network, as well as the fast-growing Promoted Listings ad format, which enables sellers to pay for premium positioning in search results on eBay. Promoted Listings drove $80 million in revenue during the crucial fourth quarter, which was a nearly 150% jump from the previous year, with 600,000 active sellers promoting 200 million listings. That’s up from 160,000 sellers a year earlier. Promoted Listings generated $200 million in revenue throughout 2018.
EBay, which generated $600 million in ad revenue last year, aims to increase that revenue 66.7% this year, CEO Devin Wenig said last month during a conference call with analysts. “We’ll continue to ramp our advertising efforts in 2019, while ensuring we achieve the right balance between user experience and monetization as we build towards $1 billion advertising revenue opportunity,” he said.
To do so, the online marketplace is building out its advertising platform to enable sellers to leverage the information it knows about its users to drive them to make purchases on eBay. While eBay is competing with other retailer players with growing ad businesses such as Amazon.com, Walmart Inc. and Target Corp., it offers a unique value proposition: It doesn’t compete with sellers, Davies says.
EBay is No. 4 in Internet Retailer’s 2019 Online Marketplaces ranking.