Promoted Listings & advertising on eBay: definitive guide [FREE download]
Over 940,000 sellers use eBay’s Promoted Listings on over 250 million listings (eBay, 2019). To occasionally sponsor a product is no longer enough in many eBay categories. With around 1.3 billion listings on eBay, many sellers find advertising necessary to boost product visibility and stand out from the competition. This is likely to continue in the post-coronavirus world.
- This whitepaper will highlight how Promoted Listings and bidding on eBay work.
- The goal is to help sellers achieve maximum sales increase while decreasing advertising costs.
- The following facts, stats and data come from reliable online sources as well as the extensive study that Webinterpret conducted on around 1,000,000 eBay listings.
The Promoted Listings Guide by Webinterpret includes:
- Essential information about Promoted Listings and ad campaign set-up
- Findings from Webinterpret’s study: key takeaways and recommendations to help sellers understand how to invest in Promoted Listings to get the best possible ROI
- Analysis of how Promoted Listings work on specific international eBay markets
- Expert advice on reducing advertising costs and creating an effective bidding strategy
- Ways of identifying sales & advertising opportunities on domestic and international eBay markets.
Advertising on eBay in the post-coronavirus world
According to Marin Software’s Q3 2019 Digital Advertising Benchmark Report, ecommerce ad spend rose 115% (Q3 2019 vs. Q3 2018).
Based on a report by WARC, global advertising spend will rise 7.1% to $660 billion this year, supported by strong growth of 13.2% in internet investments. According to James McDonald, WARC Data’s Managing Editor:
Advertising’s relationship with GDP is strong, but a slowdown in economic output as a result of the virus will not necessarily translate into reduced advertising investment.
As ecommerce advertising is on the rise, the current eBay marketplace model shows a changing dynamic between organic and paid search. In popular eBay categories, more than 50% of the first page of search results are sponsored products. This includes the first 5 search results that are getting the most clicks.
Due to the changing marketplace model, eBay sellers need a stronger and smarter advertising strategy.
A sensible advertising strategy will be extra important after the COVID-19 outbreak. On the one hand, some sellers may have experienced the coronavirus-related challenges, such as stockouts, difficulties in restocking, putting stores in “vacation mode”, etc., which may have influenced their rankings in search results.
On the other hand, online performance is holding up well for many sellers. Some companies and product categories are even growing. This trend is likely to continue in the near future.
The bottom line:
After the coronavirus outbreak, some sellers may have to invest more in digital advertising to get back up to where they were in search results. Other sellers will find advertising helpful in boosting their product visibility in the thriving yet likely competitive post-coronavirus ecommerce environment.
Promoted Listings: essential information
Promoted Listings are a pay-per-sale model (PPS), which is simpler and less risky than pay-per-impression (PPI) or pay-per-click (PPC). The seller is charged a fee only if an item sells via a Promoted Listings ad.
In contrast, Amazon Advertising is a PPC service that works in a similar way to pay-per-click ads on Google: sellers pay when shoppers click on ads (regardless of whether or not the item sells).
eBay’s Promoted Listings claim to boost visibility by over 30%.
How much does it cost to advertise on eBay?
Promoted Listings cost as much as you’re willing to pay. The ad fee is a percentage of transaction value (excluding shipping) which sellers agree to pay for the advertising.
The fee is calculated by multiplying the seller-specified bid percentage (set between 1% and 100%) by the final sales price of the listing in the campaign. For instance, if you sell a product priced at 100€ via a Promoted Listing and you are bidding 5%, you’ll pay 5€.
The amount of the bid depends on the current trending ad rate (the average rate for similar items that are currently promoted). Sellers are free to set their preferred bid percentages, but the effectiveness of the bid will depend on the trending ad rate
How to set up Promoted Listings?
There are five basic steps to setting up Promoted Listings:
- Visit your Promoted Listings dashboard inside the Seller Hub https://ebay.com/sh.
- Click “Create a new campaign”.
- Select individual listings or multiple listings in bulk. To learn more about the bulk option, watch the YouTube video Promoting Your Listings In Bulk.
- Apply an ad rate: the up-to-date trending rate is displayed below each ad rate toggle. To the right you’ll find the total price you’ll pay for your Promoted Listing in case the product sells.
- Name your campaign to track its progress later & launch it.
Smart advertising strategy: when & how should you advertise on eBay?
Ads on marketplaces positively impact product page views, transactions and revenue. In general, they’re very effective for a short boost in sales. However, an effective long-term advertising strategy is a completely different thing. For example, the level of competition depends on the time of the year, seasonal events such as Black Friday, and so on.
For starters, if sellers aren’t aware of how Promoted Listings work, they may not know how to successfully advertise on eBay: when, how or whether they actually need ads.
For example, some items or search terms may be very popular. Consider the game Minecraft. The search results include over 30,000 individual listings, which makes it extremely hard for a listing to stand out. In such cases promotion can come to the rescue.
On the other hand, listings of unique, rare or hard-to-find products will probably be visible without any extra effort. No ads required.
Sometimes sellers must put in more advertising effort. Another time products can sell relatively easily with no (excessive) ad spend. Advertising activities should be adjusted accordingly.
Your eBay advertising plan in a nutshell:
- Do your research to decide whether or how to invest in Promoted Listings.
- Estimate your ad budget.
- Set up your goals. For example, do you want to drive more sales or improve brand awareness?
- Select the right products to advertise. Your most popular products along with competitive prices have the biggest potential for sales conversions.
- Create clear, concise and persuasive product pages. Include accurate and descriptive titles, keywords, useful and relevant product information and high-quality images.
- Plan, act and test what works & what doesn’t.
- Track your progress and measure relevant metrics. Optimize your listings accordingly.
Research: how to increase sales with Promoted Listings at lower advertising costs
Ad investment involves serious and strategic allocation of funds. Poor understanding of how Promoted Listings/bidding work can result in sellers spending much more than needed on advertising. It may not bring the desired ROI, either. One of the questions is when to go for safer or more aggressive bidding.
There are many questions that are not always easy to answer, for example:
- What ad rate should I choose to get the best possible ROI?
- How to bid?
- Is the rate recommended by eBay the optimal choice for me? How about lower rates?
To find answers to such questions, Webinterpret conducted a series of experiments in 2019 & 2020. Our goal was to help eBay sellers optimize their revenue and benefit from Promoted Listings while keeping costs under control.
The subject of the analysis was the relationship between ad expenses (ad rate) and sales increase and its impact on Promoted Listings’ bidding strategy. In the experiments, we analyzed the performance of Promoted Listings on international eBay markets.
Did you know that with ad rates recommended by eBay, Promoted Listings can cost you 2-3 times more while not bringing additional revenue?
Promoted Listings research: 5 key takeaways
#1. Promoted Listings boost product visibility (impressions tend to increase 4-5 times; visits on product pages increase by 60-70%).
#2. German buyers seem more likely than US buyers to click on ads. The proportion between sponsored click rate and organic click rate is 17% higher than in the US.
#3. Ad rates (expenses) depend on the country & time. Sellers in the USA tend to pay more for ads than sellers in Germany; ad expenses before Christmas 2019 were higher than in Q1 2020.
#4. Lower ad rates can make more sense for eBay sellers from the ROI perspective. Promoted Listings increased international sales in Germany by 35% and in the USA by 54% (at advertising costs 2-3 times lower than rates recommended by eBay).
#5. Data & testing helps you determine your optimal bidding strategy. Sellers should regularly adjust their bids depending on the changing ad rates of other sellers and profit margins. The key is to find the right balance.
International advertising & sales opportunities on eBay
eBay is a huge international marketplace, but also a competitive one. For this reason, to stand out from the competition, consider paid promotion along with testing less competitive markets.
eBay gives you the possibility to sell on markets with less competition and more sales potential. These are often foreign markets where local online sellers aren’t able to offer specific products or meet the local demand.
If you’d like to grow your ecommerce sales, or, in the case of coronavirus-related challenges, retain your overall sales capacity, don’t hesitate to contact our cross-border sales specialist. You’ll learn about sales & advertising opportunities in different markets.
eBay Promoted Listings’ advertising model is seller-friendly and reduces the risk of wasting money. This contrasts with Amazon Advertising or Google Ads that require sellers to pay for traffic acquisition even if it doesn’t result in sales.
That’s why it’s worth trying Promoted Listings due to increased sales potential and the low associated risk. Advertising can significantly increase your sales both domestically and internationally.
Finding the balanced bidding strategy is the key. Applying ad rates recommended by eBay may bring the biggest sales, but due to ad costs, this may not be the best return on investment.
Webinterpret’s ecommerce solution helps sellers leverage ads on both domestic and many international markets. With access to data and vast ecommerce knowledge, we can help merchants tap into their actual sales potential to achieve the best possible ROI.
Download the full eBay Promoted Listings guide!