FAQ: What was the impact of eBay pulling Adwords on your sellers? Part I/II

June 20, 2007

Marketplaces ChannelAdvisor By ChannelAdvisor

Boxing_2Customers and industry followers have been asking us for the last week what impact, if any, we saw on eBay’s decision to stop buying Google Adwords for a week.

First, there has been a lot of confusing information out there on the topic of “how much traffic does eBay get from google?” so I wanted to take a stab at analyzing that from some datapoints we have.

Here is some of the data floating out there:

  1. Hitwise says that 10.6% of eBay’s traffic comes from Google (they don’t differentiate paid/natural).  He does note that a big chunk (25%) of it comes from the branded terms (ebay/ebay.com/www.ebay.com).
  2. Citigroup analyst Mark Mahaney came out with a 5% figure (google drives 5% of eBay’s traffic).  He didn’t cite the source, so no idea where that comes from.
  3. Jordan Rohan cited that eBay spends about $25m/Q on Google Adwords
  4. Justin Post cites comscore and says that eBay gets 6% of traffic from google (again no paid/natural breakdown).
  5. Comscore also releases data on top paid-search advertisers and ebay.com (this doesn’t count shopping.com) is at the top of the list:

In March, eBay ranked first in the US
among paid search advertisers with 802 million sponsored link
exposures, or 4.1% of the total, according to comScore Networks. That
doesn’t even take into account eBay’s comparison shopping engine,
Shopping.com, which ranked third on that list with 357 million
sponsored link exposures, or 1.8% of the total.

All of this data is really confusing and none of it seems to ‘jive’.  The datapoints that make the most sense to me are the Rohan’s $25m/Q google adword spend (because eBay buys a LOT of google adwords) and the comscore eBay top advertiser data.  The comscore data gives us sponsored link exposures which don’t mean a hill of beans in the search world so they can’t help us back-door into the ‘real numbers’.

But the $25m/Q is pretty useful.  Based on what we know about eBay’s keyword coverage (>20m keywords) and what we’ve done at ChannelAdvisor around similar programs we can back door into some things:

  • According to Comscore, eBay has 70-80m unique visitors/month
  • If eBay is spending $25/Q or $8m/m on AdWords how much are they buying?
  • If you work with a CPC range of .15-.25 (given the long-tail nature of their campaigns) you end up with eBay buying 32-53m clicks/m from google with their $8m/m spend. Let’s say they are spending way more than I think and it’s .55/click then you’re looking at 14m/m clicks.
  • Comscore measures uniques and clicks aren’t unique.  I checked and according to our data we have a .5 click/unique ratio across our customers over a 30-day latency period so applying that you have 26m/16m/7m uniques that come to eBay from their $8m/m AdWord spend (that range covers the .15/.25/.55 CPC bands)
  • If the number is 26m (.15 CPC) that’s 32% of their uniques from AdWords.
  • If the number is 16m (.25 CPC) that’s 20% of their uniques from AdWords.
  • If the number is 7m (.55 CPC) that’s 8% of their uniques from AdWords.

So I’m left scratching my head on this one.  The fast that eBay’s the top AdWords spender and thanks to Rohan we have a good idea of what that $ is and I have good data on CPC/uniques I’m finding the comscore+hitwise “% google of eBay” data hard to swallow because I’m willing to bet that eBay’s CPC is .25 and thus Adwords (note I’m not talking any organic/natural traffic here) comes out to be 20% of eBay’s unique visitors.

Possible reasons for the variance:

  1. the hitwise data is bogus (I’ve seen some loopy stuff from them)
  2. Comscore/hitwise are measuring traffic and not uniques and that looks like a smaller % than my unique analysis because other sources have much less unique/hit ratios.
  3. Rohan is over-estimating the eBay spend or that is for ebay.com/shopping.com and all eBay properties?
  4. There’s some US-only/global data slippage in some of these numbers (the comscore is usa ebay.com, not sure about Rohan’s $8m/m)
  5. I’m way off on CPC or the unique ratio (of course those are the datapoints I feel the best about 😉  )

So the bottom line is by my estimation, eBay gets about 20% of their UNIQUES from their $8m/m AdWord spend.

Part II – What does/did this mean for eBay sellers last week?