eBay To Launch Cost-Per-Sale Advertisements
eBay wants to create a new revenue opportunity by launching cost per sales ads.
eBay Inc. has a lot to do to keep up with the pace with which its rival, Amazon, is leading the market. However, the company is launching new features every day to make it happen in the foreseeable future. According to Bloomberg, it is believed that the online retailers is all set to unveil the cost per sale ads. This means that all the merchants on the company’s online marketplace will only have to pay if they are able to sell items through the platform. This is quite a good deal for merchants, as well as the company.
Furthermore, it is believed that this way, company can open up a new stream of revenues for itself and can take advantage of this revenue opportunity. eBay’s new service, due to which ‘web-merchants’ will only have to pay if they make online sales on the online marketplace, is called as Promoted Listings.
Promoted Listings service will allow the sellers on the platform to determine “what percent of a product’s sale price they are willing pay in order to run an advertisement. The higher the percentage, the more prominent the ad will be, although eBay will also consider a product’s popularity and the seller’s reputation”, reports Bloomberg.
However, many analysts believe that this strategy might cost the company, as cost per sale is a big risk. This is quite unusual as it may not generate revenues instantly and there will be ads that might not generate revenues at all. That is the reason why Google is playing safe as the search engine giant with many major internet companies that generate revenues through cost per click ads. Through this, marketers are charged every time someone clicks on the link or advertisement.
However, the new approach by eBay will be of great help to the small web-merchants. According to the vice president of advertising and monetization at eBay, Alex Linde, stated, “They make up the bulk of the company’s 25 million sellers, because they won’t have to track the effectiveness of ads or pay before a sale. The only lever these sellers had in the past was the price, and nobody wants to grow only by discounting.”
The company wants to expand its business and create additional revenue streams in order to continue with its business successfully in the market. It has lost its ‘terror effect’ and now wants to keep up with the pace to compete with market giants, such as Wal-Mart and Amazon.
