"Promoted Listings Standard" - any thoughts?

[ducks2k]

I have recently set up and monitored a "Promoted Listings Standard" on my 5000 items of collectable stamps in a very specialized collecting area - Hunting and Fishing stamps - an offshoot of "duck stamps".  I seriously doubt if my results to people selling auto parts or printer cartridges, but some thoughts may be useful.

First point is that the gross costs for a "campaign" can be quite low.  I offered the minimum 2% and have gotten a massive number of "impressions", which I would label "exposures" since there is no assurance that the little ad blocks ever made in front of a buyer's eyes (50+ per item listing).  I suspect that my results are not unusual in that 1,000 "impressions" seem to translate to 1 "click".  I'll talk about clicks -> sales later on.

Second - the downloadable report csv file contains a massive amount of data about impressions, clicking and sales.  I have serious doubts as to its accuracy, but it is very precise.  Some of the questionable items are sales without any clicks at all and some items with 5000+ "impressions" when my average of impressions per item is around 25-50.   How and why the ad servers decide what blocks to create and show is a proprietary mystery, but it certainly is not intuitive (and a bit suspicious).

Ebay's general assertion about promotion of items is that promotions increase sales.  But without any statement of methodology or testing, that claim is questionable.

For example, a recent (very nice) buyer just purchased 43 stamps for several hundred dollars.  He did it as 43 separate buy-it-now transactions because he was not aware of how to use the shopping cart.  This resulted in eBay picking up an extra 42 thirty cent transaction fees.  Most of the 43 stamps wound up as "promotion" sales because the buyer clicked on the advertisement links rather than an organic search.  He would have bought the same stamps anyway, so "promotion" was simply a handier click, rather than an advertisement generated sale.  His subsequent purchases avoided the promotion links with no loss in being able to find my stamps.

Elsewhere on the forums, I complain about all the clutter 50 advertisements creates making the original item sale more difficult.  The only plus side is that my competitors items are similarly cluttered with a lot of my stamps.  (that optimistically assumes that the ad server is placing my stamps anywhere near a "similar" or "related" item.  Similar and related are two terms eBay never defines.)

My campaign has run for 3 weeks.  In that time I have has 205 sales, of which 56 are designated "promoted".  Almost all of the 56 have been confirmed by the buyers as being casual or convenience clicks to get to something they would have gotten to otherwise, rather than new inspirations to purchase something they would not have otherwise found.

My total investment so far is $8.91 in promotion fees, for which I have received 425,000 "impressions" and 625 "clicks", which had to have cost eBay more than $8.91 to serve up.  I'm not complaining about the $8.91, but I would like some evidence that this class of promotions, in some way, increases sales (of course, MY sales, but I am curious if there is any evidence of ANYBODY's increased sales). 

It "feels" like that the MOST a structure like this can produce is taking a sale from one eBay seller and selling it to another eBay seller - a zero-sum game.  The costs to eBay in serving up the ads is not zero.  How this can add to eBay's bottom line is a mystery to me.  Maybe the magic all happens in some other sales area, but my experience "feels" sensible.

[simply-the-best-for-you]

I'm not clear what you're question is, but my sales increased greatly due to PL's.  They almost tripled.  Others see no results.  Some people love them, some people hate them.   In general they work best for those that have a lot of competition.   There have been countless "in the weeds" threads dissecting PL's, but without knowing specifically what you're asking, it's hard to guide you to one.   

[ducks2k]

@simply-the-best-for-you- I'm not asking a question as much as describing what I see and inviting comment.

I think you are correct about the significance in increased sales for highly competitive areas, but the flip side may also be true.  I'm in a very non-competitive area, and my 2% gets me hundreds of thousands of "impressions".  I'm pretty sure that so far, sales have not increased due to promotions, but the fact that my stamps dominate the various searches and items in my specialized area, minimizes the distractions provided by the immensely cluttered item listings.  For many of my items, 20-30 of the 50 items of clutter are my stamps.   If the buyer does get distracted, the odds are that he is distracted to another of my items.

I still don't see much purpose to the promotions other than to try to steal sales from other eBay sellers.  I can't see how they would attract new buyer money into the game.

[simply-the-best-for-you]

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@ducks2k wrote:

@simply-the-best-for-you- I'm not asking a question as much as describing what I see and inviting comment.

I still don't see much purpose to the promotions other than to try to steal sales from other eBay sellers.  I can't see how they would attract new buyer money into the game.

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I don't think they are intended to attract new buyers here.  Most of the promoting is on eBay.  I certainly don't consider it "stealing" sales from other sellers though.   A buyer has X amount of money to spend, I always want them to spend it with me, not someone else & I'll do anything within my power to make that happen.  

There have been so many threads deconstructing PL's, that I'm not going to do it again.  A simple search will find several for you, here's a current one.  The bottom line is that for some people it works really well & for others it doesn't work at all.  There are a lot of variables & even for those of us, who it works for, there's a lot of trial & error involved.   I almost tripled my sales & about 70% of my sales are PL sales, so all those added impressions have translated into sales for me.  OTOH, as more people start using PL's, my results are not quite what they used to be. 

ETA:  Oops, here's the thread from just the other day.  There are many more that dive into the weeds much deeper than this one does. 

https://community.ebay.com/t5/Selling/Finally-have-Sales-but-had-to-take-PLs-Promoted-Std-to-10-12-f...

[stainlessenginecovers]

We need to crunch through all that analyzation. Do you have DIRECT competition? (same EXACT items being sold by someone else)

[animesalesandmore]

Tech that is stealing... the whole point of PL is to steal sales from one another by sacrificing ur profit. I see it as a gamble pot hole because more money you got more money u will made by giving ebay more money. A never ending cycle of greed and house always wins.

[simply-the-best-for-you]

Well, you have an interesting definition of stealing.   It's basic captalism to me.   I mean General Mills buys the prime shelf space.  Are they stealing from other cereal companies?   

[dbfolks166mt]

     There really is no way to prove that the use of PL increases sales simply because you have no idea whether the sale was made as a result of PL or if it would have sold without the use of PL. Sales increase and decrease due to a number of factors it's just the nature of the market and there is no way to lock down individual reasons for those swings. It's analogous to trying to predict the stock market and there are a LOT of people, programs, computers trying to isolate the very reasons for those changes.

     Personally I don't use PL but I am not a large volume seller nor do I depend on eBay for my income. There are some sellers who swear by it and I am grateful for the fees those sellers are paying since the additional revenue it provides to eBay keeps them from looking at simply raising other fees to maintain or increase their own gross revenue. The lure of PL to sellers is the assumption that it will give them an edge over other sellers and increase sales, but they also have to consider whether they can either absorb the cost of the PL or increase their prices to cover the PL fees. 

     The use of PL also creates a prisoner's dilemma for the sellers that are using it. I have mentioned this before in other responses but the PD is a situation where individual decision-makers always have an incentive to choose in a way that creates a less than optimal outcome for the individuals as a group.

     If every seller agreed to quit using PL no seller would be paying the PL fees, which is a better outcome for all sellers as a group. However, there are the individuals that are always looking to get an edge up and would break with the group and jump back into PL. This is the very reason that some sellers continue to increase their PL percentage in an attempt to retain or increase their perceived advantage. 

     The same theory applies if every seller starts using PL. They are basically caught in the dilemma and will not stop using PL for fear of loosing a perceived advantage. In fact the reaction would probably be the opposite and that would be to increase their percentage in hopes of again attaining that perceived advantage. 

     The real winner with PL is eBay. 

[ducks2k]

@dbfolks166mt- thank you for the "Prisoner's Dilemma" reference.  It fits the situation even better the more I think about it.  Our wardens have different motivations than we sellers do.  A key point in the PD analysis is that the prisoners pretty much forced to arrive at a "solution" that is sub-optimal for each or them.  And, similarly, what benefits one prisoner hurts another.

That goes to the "stealing" word.  The comparison to capitalism in general is probably not as relevant as "crony capitalism" or "regulated capitalism" would be.  The US has a decent capitalistic system, but the playing field gets tilted in various directions through the fine print in the user-agreement also known as the tax code and regulatory agency rules.  It might be theoretically possible for an individual or business to optimize his own strategy, but it is very difficult in practice.

I probably should have used the term "taking", rather than "stealing", but the principle is the same.  One seller's gain is another's loss.

It is not possible for the "prisoners" to all agree not to use the promoted listings process, unless that forced the eBay ad servers to stop stuffing little blocks of random suggestions throughout our item listings.  It might just make them even less relevant (if that is possible...).

So, yes, we are forced to play the game as best as we can deduce the rules.  Of my 5,000 items, probably 2,000 of them have direct competition in the form of the same stamp, in the same condition being offered by different seller(s) at different prices.

What I am NOT seeing is that the PL process actually serves up the buyer these competitive items directly.  As a buyer, If I construct an organic search that closely targets a single stamp, I (sometimes) can see those alternatives neatly lined up, but the area of collector stamps does NOT have an item specific that links all stamps with the same catalog number together.  If that was truly the goal of item specifics, eBay has been singularly bad at implementing it.  IF there was that linking process, the PL percent bidding could (hypothetically) rationally guide the buyer to one choice over another.  As currently implemented, PL (in my specialty area) just serves up a myriad of loosely related items with very little connection to the item the buyer clicked on to view that individual item.

If PL actually DID serve up the competitive stamps and place them in the middle of the item listing then there probably would be a seller revolution, since the theory of creating an item listing is for the seller to persuade the buyer to buy that item.

The grocery store shelf analogy breaks down.  If the buyer is looking for a 5 pound bag of white flour, and the seller places all the 5 pound bags of white flour in the same aisle, then the manufacturer's package design comes into play, along with the cost structure that incentivizes the store to place the bags.  What the store does NOT do is to cover each bag of flour with advertising stickers from competing brands.  My opinion is that this is what is going on with the huge number of advertisements contained within each item listing.  Targeting search results is one thing, but leave my bag alone.

[my-cottage-books-and-antiques]

@dbfolks166mt  There are a number of reasons the Prisoners Dilemna does not fit this situation, but the main one can be found right here: "no seller would be paying the PL fees, which is a better outcome for all sellers as a group"

No, it is NOT a better outcome for all sellers as a group.  You do not personally use PL, and you do not want to pay ebay any PL fees, so you are ASSUMING that YOUR choice is the optimal choice for all of us to make. 

But many sellers (most of whom do not post about this here, but have posted elsewhere) have indeed figured out how to use PLS EFFECTIVELY, by which I mean, despite the additional fees, they've actually enhanced their bottom line as a result. For those sellers, eliminating PLS would NOT be an optimal outcome, it would be an outcome that removes a tool they have used profitably, a tool that has been a posititve benefit to their business. YOUR goal may be : pay no PLS fees, but THEIR goal is: Pay PL fees (even if grudgingly) to increase my profits. 

If the overriding objective for all sellers, the optimal outcome, is to pay no ebay fees, then we should all stop listing, period. While that would indeed mean we would not have to pay any ebay fees, it would also mean we would make no sales here and have no opportunity to build a profitable business here. Sorry, but my overriding goal is to sell stuff, not to avoid ebay fees. I suspect that is the goal of most sellers.

PLS is just another tool in our toolkit, which we can use or not use. Some will not use it, for various reasons. Some will use it, but they will not figure out how to use it effectively. And some will use it effectively. 

If we remove PLS, we don't remove the need to compete. We are still in competition, and we will still try to find ways to better our position within that competition. ebay does not pit us against each other, competition does that. PLS is simply a form of advertising, which is a basic component of modern capitalism. 

[wrong66]

Very well said.

[my-cottage-books-and-antiques]

@dbfolks166mt I'll also add this. You say: " I am grateful for the fees those sellers are paying since the additional revenue it provides to eBay keeps them from looking at simply raising other fees to maintain or increase their own gross revenue"

You are correct that if a company loses a revenue stream, it will seek to replace it, just as ebay went from losing its PayPal revenue stream to setting up Managed Payments. But this means, in your Prisoners Dilemna, that you are saying the optimal outcome for all sellers would be to eliminate PLS , which would result in ebay replacing it with another revenue stream, perhaps by increasing FVFs for all of us ---I don't see how that benefits those who weren't using (and thus paying) PLS fees, and I don't see how it benefits those who were using PLS effectively but would now be paying more fees with no corresponding benefit in the form of increased revenue due to the use of PLS.

So, again, not, the optimal outcome is not: eliminate PLS, because as you make very clear, ebay would find away to replace that revenue stream, and we'd be paying it. 

[dbfolks166mt]

@dbfolks166mt  There are a number of reasons the Prisoners Dilemna does not fit this situation, but the main one can be found right here: "no seller would be paying the PL fees, which is a better outcome for all sellers as a group"

No, it is NOT a better outcome for all sellers as a group.  You do not personally use PL, and you do not want to pay ebay any PL fees, so you are ASSUMING that YOUR choice is the optimal choice for all of us to make. 

But many sellers (most of whom do not post about this here, but have posted elsewhere) have indeed figured out how to use PLS EFFECTIVELY, by which I mean, despite the additional fees, they've actually enhanced their bottom line as a result. For those sellers, eliminating PLS would NOT be an optimal outcome, it would be an outcome that removes a tool they have used profitably, a tool that has been a posititve benefit to their business. YOUR goal may be : pay no PLS fees, but THEIR goal is: Pay PL fees (even if grudgingly) to increase my profits. 

If the overriding objective for all sellers, the optimal outcome, is to pay no ebay fees, then we should all stop listing, period. While that would indeed mean we would not have to pay any ebay fees, it would also mean we would make no sales here and have no opportunity to build a profitable business here. Sorry, but my overriding goal is to sell stuff, not to avoid ebay fees. I suspect that is the goal of most sellers.

PLS is just another tool in our toolkit, which we can use or not use. Some will not use it, for various reasons. Some will use it, but they will not figure out how to use it effectively. And some will use it effectively. 

If we remove PLS, we don't remove the need to compete. We are still in competition, and we will still try to find ways to better our position within that competition. ebay does not pit us against each other, competition does that. PLS is simply a form of advertising, which is a basic component of modern capitalism. 

     For many the economic principal of the prisoners dilemma is a difficult concept to grasp and I can relate to that. However, for those sellers who choose to utilize PL it most certainly applies. As far as its effect on increasing the bottom line that is debatable since there is no solid way to prove that the use of PL does in fact increase sales. There could be a multitude of factors that cause that increase or decrease but as long as the seller perception is there that it does in fact increase sales that is sufficient to pull them into the trap. Then it becomes a race to sustain that believe as they see declines in sales when they are using 2, 3 or 4% PL rates and they are then compelled to increase their PL to 10, 15, 20%.  

[luckythewinner]

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@ducks2k wrote:

 I would like some evidence that this class of promotions, in some way, increases sales (of course, MY sales, but I am curious if there is any evidence of ANYBODY's increased sales).

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In your sold listings I see 207 sold items from Aug 22 to Sep 12 (three weeks = 21 days).

In your sold listings I see 94  sold items from Aug 1 to Aug 21.  (three weeks = 21 days).

Using that as a guide, it seems to me that your $8.91 was money very well spent.

[ducks2k]

@luckythewinner- except that there are dozens of other factors interplaying here.  The most significant of them was the realization between those the two months that the automatic renewal of GTC items was renewing the fee but not actually providing any new visibility each month.  Because I had seen so many items repeating every 30 days or so, I assumed that what was happening was equivalent to a end/new listing.  Those sellers must be cancelling and listing the items again.  I attribute a lot of my sales gain to changing to that strategy and doing the cancel/list.  I have to do only 50-100 per day or I would lose the benefit of exposure.  Since everything I do is via the batch system against my own inventory database, this is easy for me.  I can't imagine a manual operation like that.

Yes, between the two months, I did start a PL campaign, but I have looked at the report detail and talked to the buyers and find very little benefit I can attribute directly to PL alone.  Most of my sales are via organic searches in which the buyer's search terms make search return placement of minor importance.  An important distinction is that my buyers are "searching", not "browsing".  They know what they are looking for and just have to force eBay to show them what they request, rather than what the AI "thinks" they are looking for.

I think the biggest benefit to me is crowding out 400,000 "impressions" that would otherwise be cluttering up my (and other's) listings.  It is more of making it less-worse, rather than a positive gain.