Promoted Listings Dynamic Rate Minimum Now 5% - Check Your General Campaigns!

[valueaddedresource]

Apparently eBay has decided to react to investor concerns about weak Q4 revenue guidance by quietly ratcheting up the minimum for Promoted Listings General Dynamic Ads to 5%. 😡

Still shows a minimum of 2% for fixed rate

But the Dynamic ad rate cap is now a minimum of 5%

Not sure how that is impacting existing campaigns with a cap below 5% but my guess is those ads just may not be delivering at this time. I'd suggest checking your campaigns and ad reports if you have it set below 5% to see if/when performance may have been impacted.

I also suspect it's not a coincidence we are seeing more and more reports around here of those suggested rates ramping up, sometimes over 20%.

https://community.ebay.com/t5/Selling/eBay-s-not-shy/m-p/34762314/highlight/true#M2481231

devon@ebay  kyle@ebay elizabeth@ebay  - can you find out more information on this for us please, like when it started and why sellers weren't proactively informed? Or on the extremely off chance it's a glitch and not an intentional change, please report it to the appropriate teams. Thanks!

[my-cottage-books-and-antiques]

@valueaddedresource 

Absolutely disgraceful. This should have been part of the October Seller Update. There is NO excuse for not including this in the Update. Even if this is only a test, it should have been announced.  

Almost 30 years, and this company STILL does not understand the importance of transparency and seller engagement.

As to the change itself, it reeks of desperation. I've said it before, ebay has become an adoholic, and that might keep them stay afloat short term, but it is not a long term solution, and the sooner they realize that, the better.

[caldreamer]

As long as "fixed rate" remains at 2% am okay with that.    I don't use "dynamic promotion" where EBAY automatically adjusts the rates up and down (all that does is compete with other sellers and give ALL the money to EBAY).

[valueaddedresource]

@my-cottage-books-and-antiques agree 100%!

Jamie and VP Ads Alex Kazim should be ashamed. And the timing of it all too - casting eBay as Scrooge or the Grinch in the small business holiday story is certainly....a choice.

Sadly I don't expect there will be feel good, warm and fuzzy, change of heart at the end of this tale.

[my-cottage-books-and-antiques]

@valueaddedresource 

This definitely doesn't appear to be a glitch. 

True, for now, you can still set a minimum of 2%, but this change suggests that if you do set a rate below 5% in the Fixed Rate module, you can expect very little in the way of impressions. While some sellers might find that a fixed rate of 2, or 3, or 4% is still viable, I suspect most will find that, for all practical purposes, 5% is effectively (if not yet officially) the new minimum. 

[dolcetreasures]

This website is completely floundering. 

[valueaddedresource]

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@caldreamer wrote:

As long as "fixed rate" remains at 2% am okay with that.    I don't use "dynamic promotion" where EBAY automatically adjusts the rates up and down (all that does is compete with other sellers and give ALL the money to EBAY).

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@caldreamer totally understandable but that's why the Dynamic ad rate cap is so important for those who use it - it allows sellers to take advantage of the ability for the rate to fluctuate to be more competitive...up to a point that is within the seller's control.

If, as I suspect, eBay is just simply not serving ads for those who have a Dynamic campaign with a cap below 5%, it might at first glance seem counterproductive to have just turned those ads off rather than warning sellers and encouraging them to increase the cap.

But eBay doesn't particularly care which seller makes a sale and basically turning off a bunch of ads at lower rates would just tip things further in favor of sellers who had already opted in to higher rates, making it more likely eBay will be able to take that higher percentage.

It's super sneaky too because those who already have their rate cap set at 5%+ won't question it, since they were already expecting to pay that rate any way, and may even be cheering if their sales go up, with no one even realizing it's because eBay put their big heavy thumb on the scales to goose the numbers.

[valueaddedresource]

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@my-cottage-books-and-antiques wrote:

@valueaddedresource 

This definitely doesn't appear to be a glitch. 

True, for now, you can still set a minimum of 2%, but this change suggests that if you do set a rate below 5% in the Fixed Rate module, you can expect very little in the way of impressions. While some sellers might find that a fixed rate of 2, or 3, or 4% is still viable, I suspect most will find that, for all practical purposes, 5% is effectively (if not yet officially) the new minimum. 

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@my-cottage-books-and-antiques I completely agree it does not appear to be a glitch...I mostly just threw that in there as an attempt to be charitable and maybe even provide a gracious way out of this mess for eBay. 😂

But no, I don't really believe there is any way this is anything but a very intentional money grab at the worst possible time of year for sellers.

Also agree on your thoughts about where this is going - the fact is, if sellers using the Dynamic option are forced to a 5% minimum, that will naturally raise the competitive bar and reduce performance for fixed rate below that amount, which will likely basically make 5% the de facto minimum eventually there too.

[my-cottage-books-and-antiques]

@valueaddedresource  Sadly, I suspect that from a functional viewpoint, this probably made sense....since the cap is related to the recommended rate, if there are NO recommended rates below 5% anymore (which would not surprise me in the least),then why allow a cap of 4%?

As I say, some seller might find a fixed rate less than 5% is still worthwhile for their business, but I think it is going to be more and more difficult to really get much benefit from anything less than 5%.

But again, there is simply NO excuse for not announcing this. 

[valueaddedresource]

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@dolcetreasures wrote:

This website is completely floundering. 

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@dolcetreasures yep....as @my-cottage-books-and-antiques said, the desperation is on full display. 😞 

Maybe sellers should join together for a 30 day no promoted listings sobriety solidarity challenge to support eBay in getting clean and beating their adoholism problem.

[my-cottage-books-and-antiques]

@valueaddedresource 😂 great idea!

Originally the Ads Team was supposed to be focused on increasing sales velocity (and thus GMV), but it clearly is now designed to increase revenue, and they have found easy ways to do it...just make some rule changes: increase the minimum, change the fee from item price to Total price, the halo rule....all aimed at easily increasing revenue without having to increase sales.

[dolcetreasures]

The writing is on the wall, it’s time to get out of here before the fee structure becomes even more burdensome.  They are clearly aiming for the jugular. 

[zamo-zuan]

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@my-cottage-books-and-antiques wrote:

@valueaddedresource  Sadly, I suspect that from a functional viewpoint, this probably made sense....since the cap is related to the recommended rate, if there are NO recommended rates below 5% anymore (which would not surprise me in the least),then why allow a cap of 4%?

As I say, some seller might find a fixed rate less than 5% is still worthwhile for their business, but I think it is going to be more and more difficult to really get much benefit from anything less than 5%.

But again, there is simply NO excuse for not announcing this. 

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For me, the highlighted area is the core of the issue. It has *already* become an "ad-race" where we had to be above 5%. But is this really because competitors are putting in higher ad rates than us? Or is it because eBay itself is pressuring these ad rates?

If the price of an item is straight from manufacturer retails for $100, and all the most competitive sellers are priced at $105 or less, how on earth is it that we currently need to hit 8% ad investment to get any significant traffic?

Also simply speaking to the sellers (as motors sellers often network with each other) we know they aren't investing so high.

When the site is literally designed around "more ad investment" rather than actual healthy competition, what way is there to go but down?

[valueaddedresource]

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@zamo-zuan wrote:

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@my-cottage-books-and-antiques wrote:

@valueaddedresource  Sadly, I suspect that from a functional viewpoint, this probably made sense....since the cap is related to the recommended rate, if there are NO recommended rates below 5% anymore (which would not surprise me in the least),then why allow a cap of 4%?

As I say, some seller might find a fixed rate less than 5% is still worthwhile for their business, but I think it is going to be more and more difficult to really get much benefit from anything less than 5%.

But again, there is simply NO excuse for not announcing this. 

---

For me, the highlighted area is the core of the issue. It has *already* become an "ad-race" where we had to be above 5%. But is this really because competitors are putting in higher ad rates than us? Or is it because eBay itself is pressuring these ad rates?

If the price of an item is straight from manufacturer retails for $100, and all the most competitive sellers are priced at $105 or less, how on earth is it that we currently need to hit 8% ad investment to get any significant traffic?

Also simply speaking to the sellers (as motors sellers often network with each other) we know they aren't investing so high.

When the site is literally designed around "more ad investment" rather than actual healthy competition, what way is there to go but down?

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@zamo-zuan was just thinking of you while watching a YouTube video discussing the changes where one seller said they don't think it's a big deal because if you were using Dynamic you were likely already at 8-10% or more any way since 2-5% isn't much room for Dynamic to swing.

Setting aside that ignores the broader knock on effects that could put pressure on those who don't use Dynamic that we've discussed here, my first thought was...he clearly doesn't sell in Motors or know anyone who does. 😂

[zamo-zuan]

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@valueaddedresource wrote:

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@zamo-zuan was just thinking of you while watching a YouTube video discussing the changes where one seller said they don't think it's a big deal because if you were using Dynamic you were likely already at 8-10% or more any way since 2-5% isn't much room for Dynamic to swing.

Setting aside that ignores the broader knock on effects that could put pressure on those who don't use Dynamic that we've discussed here, my first thought was...he clearly doesn't sell in Motors or know anyone who does. 😂

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Absolutely. Being in Motors makes it quite easy to get a bigger picture of what's going on, not just when getting items straight from manufacturer, but also monitoring aftermarket/MAP pricing/etc. You're not legally allowed to go under certain prices on products with MAP pricing, and the manufacturers are transparent about the cheapest possible prices wholesalers can have. So eBay truly opens the curtain and reveals the truth when their ad recommendations are literally double the maximum ad number that you'd be able to make a profit with.

Also in my earlier example, I had simplified it to be as easy as possible for readers to understand. But just imagine when with our real numbers, we're set on the high end at 8%... And eBay is recommending 18.8%! Even with straight from manufacturer prices, it's impossible to be competitively priced while having that high of an ad rate. Whoever is in charge has lost their mind.