How to use AI-automated seller tools for effective advertising on eBay [Analysis]
eBay Advertising (eBay Promoted Listings) is playing a more and more significant role on the marketplace.
Therefore, eBay sellers must leverage relevant marketing tools to benefit from positioning their products in the best places offered by the marketplace. This way, with no or hardly any marketing effort, they can beat their competitors and maximize sales.
But how to do it exactly?
In this article you’ll learn about:
- eBay Promoted Listings (Standard, Advanced): the essential information and best practices
- Similarities and differences between markets and advertising services (analysis)
- How to use automation to optimize campaigns, lower advertising costs and achieve the best ROI with your eBay advertising strategy.
eBay Promoted Listings Standard and Advanced
Advertising on eBay started with the CPS (Cost-per-sale) model which was an attractive way of promoting listings on similar product pages and in search results.
Last year eBay rebranded its advertising services after launching a new service that helps sellers better position their products in search results.
The eBay advertising service based on the CPS model is now called “Promoted Listings Standard” (PLS). It allows sellers to display ads on similar product pages and on lower positions in search results. PLS is suitable for most products and can be applied widely across the inventory.
The new service, called “Promoted Listings Advanced” (PLA), is a CPC (Cost-per-click) model. It allows sellers to show ads in top search results, thus helping them drive a significant share of sales. Additionally, it offers more tools and data for campaign optimization, e.g. sellers can specify search terms for which ads will be displayed.
Currently PLA is available in Australia, France, Germany, Italy, the UK and the USA. The list is likely to include more countries as eBay rolls out the new advertising service.
In general, CPC campaigns are riskier, but they can also bring a higher ROI. However, a wrong campaign setup may bring costs and hardly any new sales. On the other hand, a well-optimized campaign may generate a significant sales uplift while keeping costs low.
Promoted Listings Advanced can bring a very good ROI if it’s applied correctly for the right products.
Both services (PLS and PLA) can be used at the same time. So to maximize profit, one product can be part of both types of campaigns.
Which products are successful in eBay PLA?
Selecting products for promotion with PLA is important as CPC campaigns are designed for a specific group of items. The 2 most important factors to consider are sales conversion and sales volume.
Successful products in PLA have a high sales conversion. This means that each click on the ad has a high chance of becoming a transaction (money invested in CPC will bring profit).
Sales conversion affects the campaign’s ROI which is usually measured with the ACoS (Advertising Cost of Sales: a ratio between ad cost and ad sales). A lower ACoS means better results and a higher ROI.
The ACoS also depends on the product price. It’s much easier to get a low ACoS if the product price is high (for cheap products the conversion has to be higher than for more expensive items).
Sales volume affects the impact of PLA on total sales. Hence, it’s better to choose best-selling products generating the majority of transactions and avoid promoting the so-called “long tail” (less popular products in lower demand).
But what should you do with a product with a big sales volume and a low conversion rate? Should you promote such a listing?
In most cases, yes, you should. However, be thoughtful about choosing keywords and avoid very popular search terms. Popular terms tend to attract lower quality traffic from buyers who are likely to be exploring available items. In other words, they may not be clear yet about what they’re looking for and thus aren’t ready to finalize the purchase.
Similarities and differences between markets and advertising services: analysis
We have compared advertising services on the top 3 eBay markets: the USA, the UK and Germany.
Here are the main takeaways.
#1. Buyers in Germany and the UK are more likely to click on ads (+21% and +15% respectively) than in the USA. This pattern is observed in both PLA and PLS.
#2. Typically, PLA’s CTR is 10-30 times higher (12x on average) than PLS’s. It also tends to be 1.2-4 times higher (1.5x on average) than the organic CTR (i.e. without ads). This is due to PLA ads being placed in the top search results (i.e. often the most visited ones).
#3. SCR (sales conversion rate) in PLA is usually 10-50 times higher (20x on average) than in PLS or organically.
#4. CTR and SCR in PLA differ widely depending on the keywords used in campaigns. More specific keywords lead to higher conversions.
How to address challenges in manual managing campaigns and ad groups?
PLA is an advanced product which gives sellers a lot of control over marketing campaigns. However, it requires a well-thought strategy to bring the best results.
Setting up advertising campaigns on eBay
When setting up campaigns you have to:
- Select products for promotion (see “Which products are successful in PLA?”)
- Decide how to organize similar items to create ad groups
- Pick keywords and assign them to ad groups
- Select a match type for each keyword
- Define your bid for each keyword (how much you’re willing to pay per click).
To simplify the process, eBay provides recommendations for steps 1, 3 and 5. However, plenty of improvement is still possible, which is necessary for most sellers to achieve good results.
For example, for selecting products for promotion, eBay recommendations rely on potential traffic volume without considering traffic quality. This may result in high advertising costs (with ads attracting many clicks, but hardly any sales). Also, there’s room for improvement in keyword recommendations as they usually miss many profitable search terms.
Moreover, sellers should use data for regular campaign optimization and maintenance. They should go through the five steps again and again, especially steps 3-5. Unfortunately, doing this manually on a regular basis is a laborious and time-consuming process.
For example, a small seller wants to promote 50 different groups of products and has around 20 keywords in each group. As a result, the seller needs to manage, track and analyze 1000 keywords and bids. They should do this regularly (e.g. weekly) to keep the bids competitive, identify profitable search terms and eliminate budget draining phrases. For mid-size and large merchants, these numbers can be much higher.
Ad groups on eBay
Now consider ad groups. Based on our experience, ad groups should be much more detailed than product categories on eBay.
Although large ad groups can be easier to manage manually, they tend to have worse sales conversions and a higher ACoS. This is due to the fact that all products within the same ad group share the same keywords and bids, whereas in reality most products need an individual approach.
Thus, each ad group should ideally contain only a few products or just one.
eBay Promoted Listings: automated solutions
PLA campaigns help sellers increase sales by displaying their products in the top search results. As it’s a relatively new service, it can give early adopters a competitive advantage.
However, setting up, monitoring and optimizing campaigns means plenty of manual work. On top of this, managing CPC campaigns requires experience and it can be very time-consuming. As a consequence, many businesses decide to hire marketing agencies.
But there’s a more cost-effective and hassle-free alternative: AI-powered, automated solutions.
AI-based automated campaign optimization helps sellers to minimize effort and maximize quality. It helps to leverage eBay recommendations, optimize bids and use relevant keywords (with less competition and a higher ROI). Spending on low-performing keywords is significantly reduced and search terms driving sales get more investment.
Webinterpret offers a solution that allows sellers to set up and optimize campaigns automatically, reach top search results effortlessly and increase sales. It’s a time-saving, high-quality service that is offered at a fraction of the marketing agency cost.
Before launching a campaign, we recommend you choose your target ACoS based on your business model and margins policy. Then our AI tool automatically picks the best advertising strategies to reach your target ACoS.
Furthermore, our tool assesses traffic quality by checking the item’s sales conversion rate for a variety of search terms. It considers a wide context of item properties, related products, seasonality, category and seller characteristics.
It also combines many different data sources with historical data from organic, PLS and PLA (if available) traffic to fully understand the item’s potential.
Don’t wait to use automation to grow your sales right now!
How to use AI based automation to grow your sales?