eBay Enters Contextual Ad Business - Some Interesting Points
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From the sounds of it, Google doesn’t seem to think that eBay’s AdContext is in direct competition with AdSense. Indeed, as it currently stands, it can be argued that it isn’t. On the other hand, keep in mind that eBay owns Shopping.com, so surely AdContext could be extended to advertise other commercial sites. If eBay starts signing up advertisers who offer specific items for sale through eBay ads, suddenly the two programs start looking very similar.
On the other hand, it’s worth emphasizing the element that is, at least in my opinion, the biggest differentiator between AdContext and AdSense. AdContext is cost-per-action, not cost-per-click. It has the potential to be the largest scale application of a CPA program yet. That means a lot of people are going to be watching the results. Given that eBay’s affiliate program is one of the largest and longest-running on the Web, if anyone has a chance of making it a success, it’s eBay. And if it is successful, as always, you can expect other large web companies who make their money from advertising (read: major search engines) to institute their own CPA programs.
Another interesting point is that eBay’s stated goal with this program is to help affiliates convert users (and thus earn money) by driving them to the products they want. eBay plans to do this by “studying user behavior, activation patterns, affiliate performance and onsite activity.” In short, eBay will be mining buyer behavior to improve ad targeting. This is interesting because one of the alleged motivations behind Google’s rumored and as-yet-unlaunched GBuy program is gaining more customer data to mine so that Google can improve ad targeting.
Finally, I’d like to point out that this move will clearly lessen eBay’s dependence on Google. Anyone who searches regularly on Google knows that eBay heavily invests in search ads. Even its recent wide-ranging agreement with Yahoo isn’t likely to change that, because Google casts such a long shadow over the Web; if you’re looking for something on the Web, no matter what and no matter where you live, there’s a 60 percent chance you’ll start your search at Google. And let’s face it, eBay is all about looking for things you want too. If you can find something you’ve been looking for while you’re doing something else you enjoy, though (like reading your favorite blogger), so much the better for eBay.
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