eBay Launches Ad Targeting Mobile Users
Seeking to change its perception as an auction marketplace, eBay last week launched what is believed to be the first major ad campaign aimed at the mobile consumer.
Dubbed “When it’s on your mind, it’s on eBay,” the TV commercials close with the tagline, “Buy it New. Buy it now.” to highlight both its mobile apps and its fixed-priced, new offerings. Of its 200 million live listings, 62 percent are fixed-price and 70 percent are new.
The campaign, eBay’s biggest effort in four years, is reportedly a bid to make eBay more hip and relevant while capitalizing on its expertise in the mobile area. The company said its suite of mobile applications have been downloaded nearly 50 million times, and mobile sales on eBay are expected to exceed $4 billion by the end of 2011. According to The Associated Press, mobile apps also attract new users. Between January and July, nearly 500,000 eBay shoppers joined up and made their first purchase via mobile.
“eBay’s target customers are shopping enthusiasts — people who are passionate about shopping, whenever and wherever the moment of inspiration strikes,” said Richelle Parham, chief marketing officer, eBay North America, in a statement. “Shopping enthusiasts are heavy online users with a particular affinity for mobile shopping, and this campaign extends eBay’s powerful brand to reach them at the moment they want to shop.”
The ads are geared toward three types of mobile-users: the fashionista, the electronics junkie and the auto parts fan. eBay found that 60 percent of fashion enthusiasts and 65 percent of electronics enthusiasts own smartphones versus less than 30 percent of the general public
The ads show mobile users in different situations when shopping inspiration strikes. In one commercial, a man named Pete is mocked by co-workers for being the only person in the board room without a tablet computer. One co-worker drones, “Me Pete, me use pen!” Pete takes out his smartphone and buys a tablet on eBay, although the commercial ends with his pen leaking blue ink all over his shirt pocket.
Commercials kicked off last Wednesday on shows including Top Gear, SportsCenter, Tosh.0, The Daily Show with Jon Stewart, Top Chef and The Rachel Zoe Project. Street-level outdoor executions of the campaign will use custom Quick Response (QR) codes to encourage buying on the spot.
Forrester Relevant Products/Services analyst Sucharita Mulpuru told the AP that she’s not sure if the campaign will change consumer’s perceptions on eBay. But she believes the mobile shopping focus makes sense since the market is small so far and eBay offers one of the best mobile shopping experiences.
“It’s a growth engine for the marketplace,” she said. “They may as well double down on it.”
Discussion Questions
Discussion Questions: Is emphasizing mobile shopping the right path for eBay to change perceptions in the marketplace? Do you think eBay is successfully proving to the public that it has shifted away from its auction-house roots?
The further eBay strays from its core competencies, the further it tries to compete with Amazon. This has proven increasingly unsuccessful for them and an advertising campaign isn’t going to help this.
eBay is right to push mobile shopping; that’s where consumers are headed. I’m not sure that eBay has to change perceptions in the marketplace. They have successfully blended “buy it now” and auction shopping. My biggest complaint about eBay is the need to sort through so many listings to find what I am looking to buy. With small screens on mobile phones, this could be a hindrance.
eBay has a huge mountain to climb when it comes to new products. When you think eBay, the first thing that comes to mind is auctions and bidding for stuff. So aside from a new mobile application, I have to ask, they do their job so well, why not focus on the core business? Online shopping for new products is a very competitive marketplace with countless companies selling new items either online or via mobile. eBay is a big recognizable brand for what it’s known for. Why mess with success?
There are two points here. First, eBay wants to be like Amazon. They built a brand around auctions or a nationwide tag sale. Over the years, small vendors started offering and selling new merchandise. Now they are promoting buying new and have supported this with web search advertising. Put in any product and eBay will show up as a source. Second, they are promoting mobile purchasing. While mobile sales will grow over time, just like online sales the categories of products will be defined. Not all products work with online sales and an even smaller group will work with mobile sales. We just continue to segment the marketplace.
Brand, not channel, is the issue with eBay. Why?
1. It is firmly associated with auctions. Sub-brands like StubHub are more elastic
2. Its marketing is dispersed by its need to serve two constituencies: sellers and buyers (this case addresses the latter; the former keep the lights on)
3. Even among buyers, it risks going too broad: shopping enthusiasts is everyone (better: fashionistas and electronics junkies)
How can eBay change brand perceptions? Consider Priceline, which has used William Shatner to boldly go into traditional pricing under the rubric of “The Negotiator.”
The mobile channel is indeed growing, but small even by eBay’s own numbers: less than 5% of 2010 sales volume ($54B in gross merchandise volume, $2B through mobile apps). Beyond smart marketing, eBay needs fluid navigation, no-brainer search functionality and an enjoyable user experience on a small screen. Mobile conversion rates are often lower than website, and eBay is drawing in new shoppers who may not be as familiar with it.
eBay seeks to become “Amazon Without Borders” (no home-stocked inventory, and no pun intended, Borders Books). Amazon has dipped more than a toe in these waters recently, and half of my orders from them are shipped from offsite warehouses. That’s cool. More competition is good for consumers. Hey, Facebook now wants to be YouTube.
From experience, I know that selling from my warehouses via Amazon is far more difficult and far less profitable than selling via eBay. eBay’s found a selling niche, strengthened even further by their PayPal payment system.
I am particularly impressed by the comments from Richelle Parham, eBay’s CMO, that in ’10 purchases from eBay via mobile devices “totaled $2 billion” and that “most items for sale are new.” That’s Amazon without a central distribution center, and that’s a lot of money.
For eBay it’s clear that their mobile selling app target audience is defined by their media buy – SSWs (Small Screen Wanderers, sometimes known as SSWD: Small Screen Wanderers with Drooling). But, they spend a greater percentage of their income (or allowances) online than other consumer demos. It’s a lucrative base from which to build.
I think the emphasis on mobile can be fine. Some good brand messages out there are probably generally worthwhile as I for one haven’t noticed much recently. Making sure that the ease of use in terms of search, filtering and even payment are mobile ready, is key. Whether or not it proves great for shopping depends on some of these fundamentals changing, but I could see it helping with following existing bids, providing feedback and so on.
Share of eyeballs and share of wallet are critical positions for eBay. Ad programs should be a part of their everyday model. This will enhance their profitability, while enhancing their positioning with key retailers who can compete in this space. This is important to eBay’s changing and growing in this online environment. Adapt or perish!