Behind eBay’s Ads Business: We Think Our User Data Is ‘Pretty Important’

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triadThree years ago, eBay rebooted its advertising business after stepping back from a five-year alliance with Yahoo, initially established as a way to offset Google’s growing influence online.

"[2011 was] the year we formed a partnership with Triad Retail Media and, earlier that year, we bought WHERE Ads, which became the PayPal Media Network,” said Stephen Howard-Sarin, head of North American display advertising for eBay. “And eBay Enterprise, likewise, was at that time investing and continues to invest in marketing services for enterprise clients. Across the business, organically, you saw eBay moving more strongly into advertising as part of the overall connected commerce mission.”

As Google and Amazon battle to own the commerce funnel, eBay says it differentiates through its first-party datasets around 128 million active users, its depth of choice in programmatic ad buys and its audience reach. Howard-Sarin and Brian Quinn, CRO of Triad Retail Media, updated AdExchanger on eBay’s ads business.

AdExchanger: Mobile was huge for eBay in Q4. How does that compare with desktop?

STEPHEN HOWARD-SARIN: We did $22 billion of transactions on our mobile commerce app last year for eBay Marketplaces. That’s not [even including] PayPal, [which hit $27 billion]. It’s an astonishing number that more than doubled year over year. We’re experiencing hypergrowth in our core business in mobile and that is creating opportunities for us with advertising, as well. We launched, via the eBay Audience Platform (EAP), our first mobile offerings last year. We’ve got an even better competitive position in mobile than we do on the desktop, quite frankly.

How do you handle cross-device demand?

STEPHEN HOWARD-SARIN: The thing we have that very few other companies have is a shared identity across devices. We know who you are when you’re in the eBay environment on mobile, because you have to log in. All of the user profile data we leverage on desktop, we can now leverage on mobile. We don’t depend on cookies, and our underlying technology platforms coordinate and match IDs, so when you switch from an iPhone to an Android phone, we figure it out as soon as you touch eBay. We’ve solved, intrinsically, one of the fundamental problems with mobile advertising and omnichannel advertising, and I can’t wait to spend this year driving that point home.

How do you address offline linkages?

STEPHEN HOWARD-SARIN: The in-store stuff is frankly a realm of fundamental innovation, with PayPal Beacon, smart TVs and interactive shopping windows. We have eBay Now, where we deliver things from local, physical stores to where you are. There’s a lot of exciting innovation that’s happening in that space, but from a marketer and advertiser perspective, I do not think you can overlook the giant footprint of eBay and mobile.

A lot of publishers are pushing video or “click-to-purchase” in-placement. What do you want to develop as far as unit functionality?

BRIAN QUINN: One area we have a bit of a gap in is video. And this is something we see across the Triad portfolio [of ecommerce sites]. There is a lot of money flowing into that [area] largely in the pre-roll business, so we’re actually looking at the eBay Audience Platform and being able to access pre-roll video and then we have the eBay data behind that with a premium built in. ... The data is so powerful and has such scale, so the ability to deliver people who are really shopping for a cell phone because we know they are, and being able to have them run video against those eBay shoppers is an exciting notion. We’re starting to roll that out now.

Although it is still early days for the eBay Audience Platform, what sort of traction have you seen?

STEPHEN HOWARD-SARIN: We’ve moved … into programmatic in a way that has reaped us terrific rewards and I hope really distinguishes us in the marketplace. Over the last year, [we’ve launched the] eBay Audience Platform, which is an off-eBay business where we act behind the scenes as a trading desk. We are a managed service to marketers … [who] have performance goals they need to achieve and [who work with] eBay’s operations team and analytics team, which helps them achieve those goals. We then cut a deal with the marketer, we go evaluate, discover and deliver the audiences that will satisfy their needs. That whole process is a little bit different than the programmatic supply side, because it’s really a programmatic buy-side operation. That’s where we’ve been focusing a lot of our technology dollars, frankly, over the last two years in audience platform back-end tools, because EAP has to learn things and solve things during a campaign in order to deliver results.

Can you elaborate on your scale, reach and how you’re approaching programmatic planning conversations?

STEPHEN HOWARD-SARIN: To be clear, the client-facing sales portion is all managed through Triad. When we go in to a marketer, we really want to be able to say, what are your needs and what are the products we have? If a [potential customer] already has their own first-party data and their own buying tools, and what they need is an open and flexible and data-rich supply side, we talk to them about private marketplaces. If they’re saying, I want takeovers and share of voice, then I’ve got to know that I’m not cookie-hunting. If they’re trying to establish a base level of awareness across in-market shoppers, then we say, “Ok, so you want to do a guaranteed buy,” because we can serve up the same audiences with the added value of certainty and context and above-the-fold placements where you know exactly what you’re going to get.

If they say, "I’m looking for audiences that are really hard to find," or, "I’m looking for a strict performance goal and I’m a little fuzzy around exact audience," or if I want to advertise things that eBay Marketplaces won’t want me to advertise, then we say, "OK, EAP is the thing," because that allows you to discover what is really going to work for you because we know more about these users than you can possibly know. In the best cases, when we talk to real marketers, they have needs all up and down this spectrum. The age of standalone agencies that just do mobile, social or programmatic, or, certainly, the age of marketers who [would only focus on how] to buy display, for instance, those days are gone.

How is all of this “choice” impacting the people part of the equation?

BRIAN QUINN: I talked a little bit about it on a panel at [the Industry Preview show] when we talked about sales teams, and we created a programmatic specialists team that works in tandem with the direct display teams. … The other point I made on the panel is, "Is programmatic adoption going to continue to create less need for people?" and we see the opposite – it really requires a lot of really smart people to be able to go to marketers with real insights to what the audience can mean. An example is, we do a lot of business with auto marketers, OEMs, and they want to reach in-market buyers, and that third-party data – everybody has it, and we kind of use it as a foundation, but what about these other buying behaviors that would lead you to a Cadillac buyer? And that’s something we’ve applied and those insights have really led to good successes for the brand and we’re looking forward to growing it more this year.

In an earlier interview, eBay said it works PubMatic on the supply side of business. Does eBay build any data-management tools internally?

STEPHEN HOWARD-SARIN: EBay at its core is a technology company, so we are building proprietary technology tools, but we also don’t want to close the door to the best-in-class offerings. Across the board we have tested and partnered with a variety of companies. We have different partnerships in different regions around the world to use the best tools for both EAP and the supply side of programmatic.

We definitely have a philosophy: Use best-in-class tools and build best-in-class tools where we can. But that does not mean it’s my way or the highway when it comes to using in-house tools. We have absolutely focused first and foremost of the management of eBay user data. We think we are better at doing that than anybody else.

Do you license data?

While back before 2011, we licensed data to BlueKai and used their platforms, and frankly it was a revenue stream for us as well, we stopped all that in 2010 and said, "This is the essential ingredient in our advertising business and so we must control that."

The first step was ending all data licensing outside the building, so we do use BlueKai on the marketing side for some purposes, but we don’t have a data supply partnership with BlueKai at all. And, in the last 18 months, we’ve built up an internal DMP system that powers both our premium programmatic offerings, EAP and increasingly powers the traditional, on-eBay business because we think our user data is pretty important.

What’s new with eBay’s direct-response business?

STEPHEN HOWARD-SARIN: EBay has operated one of the largest global networks for product listing ads in the world for years. We rebranded it last year as the eBay Commerce Network, which is an unfamiliar name, but a very familiar business. We are No. 2 in the space behind Google, have close to 10,000 retail partners and it’s a straight-up CPC, direct-response business that is a large and growing business for us. It’s not the ad agency world that Brian and I live in. When you look at eBay advertising, we have more than one tool in the toolchest and obviously Amazon does too and they roll these things together in their offerings and when they talk about it, but we tend to distinguish between the two when we talk about display and PLA because it’s very different customers, in many ways, and it serves a different purpose.

 

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