Will CSEs move into the AdWords gap left by eBay?

June 26, 2007

eBay will be shifting ad dollars away from AdWords (AW) and spreading it across other advertising channels like Y!, MSN and possibly banner ads after the big eBay Live showdown blackout.

It’s known that eBay is the largest advertiser for US AW spend — at least for the past quarter — generating 3.8 percent of sponsored impressions.

Over on the eBay Strategies blog, Scot noted that some ChannelAdvisor merchants saw a material 20% drop in sales as a result of the AdWords blackout.  If this trend continues, merchants will have even more of an incentive to “break out of the eBay cage” and deploy products across CSEs.

This is an opportunity for CSEs to start buying up more AdWords — driving more traffic to their properties and driving up the value of their properties.

So will CSEs move into the AW gap?  Will this have any material effect on CPC?

It remains to be seen whether eBay’s AW spend slowdown will actually affect CPC.   I predict that certain terms will temporarily be bid down, while competitors notice and swoop in — driving CPC back up as it approaches equilibrium again.

Talk to me — what do you think?

Written by Scott Hurff.  scott.hurff at channeladvisor (that’s dot com).