ebay AdContext Product Manager Sheds Light on Program

One of the product managers from ebay’s new AdContext contextual ad program, Ken, has just left a comment on my previous post about AdContext. As the comment was pretty long and quite comprehensive I thought I’d promote it to be a post of it’s own. Hopefully it sheds some light on AdContext for those of you considering joining the program. Keep in mind the information is from someone working on it so there is an element of natural bias there – but I think Ken’s done a reasonably good job. Thanks for stopping by mate. Here’s his comment:

I’m one of the product managers for eBay AdContext. I just read Darren’s post and everyone’s comments and I wanted to give everyone some information so you can decide if AdContext is worth your time (or not :). I’ll try to keep it factual so you won’t think I’m trying to pull some marketing spin here.

Payout structure: The payout structure for eBay AdContext is based on eBay’s affiliate program. In the US this based on a revenue share for bids, BINs as well as each new confirmed registered user (CRU) you send to eBay. Details are here. For other countries where eBay operates the compensation structure is not revenue share but pays out on each bid, BIN and CRU (for example, see the UK payout structure here).

Revenue share percentage: Note that the minimum tier pays 40% of the revenue and the maximum tier is 70% (not the 30% and 60% that Darren had in his original post).

Buy It Now (BIN): Publishers will have the ability to have ad units show only BIN listings in the ad unit if they so choose. This should address the concern that was raised that people raised about not allowing BIN listings to be part of AdContext. Also, as Arnie pointed out in his comment, you can show auctions that are close to their ending time so the odds of winning quickly are higher.

Winning Bids/BINs: Note that the publisher can actually generate revenue from multiple winning bids/BINs (not just one). The publisher “owns” the referral for up to 7 days and any winning bids/BINs generated in this time period contribute to the revenue shared with the publisher. For instance, a person reading a cell phone review can click on an ad unit for a cell phone and purchases it via Buy-It-Now and then may decide to place a bid on a bluetooth headset and win that auction 4 days later. Both the revenue on BIN cell phone and the auction bluetooth headset are part of the revenue share to that publisher. Note that since tracking is done on a “last publisher to refer the user wins” basis by CJ.

Category Hints: When creating their ad unit publishers have the ability to provide category hints to the system. These category hints map 1-to-1 to the eBay category structure and will optimize the keywords and the listings that are displayed in the ad unit . For instance, if you know that your site is oriented towards sports memorabilia instead of sporting goods, you can provide a category hint that will allow AdContext to focus on just sports memorabilia. This addresses David Bain’s comment about Chitika’s eMiniMalls ad categories.

Ad Unit Look and Feel: The ad units are highly customizable by the publisher to fit in with their website’s design. Your ad unit look and feel only takes 2 things from the auction listing: the text of the listing title and the listing picture. The colors, fonts, spacing that are selected by a seller on eBay for their listing do not override your ad unit look and feel. This addresses part of Tom’s comment on how AdContext ad units would be not as blog-friendly.

Listing Titles: Tom also mentioned in his comment that listings have “Crap headlines followed by crap sub-heads!”. I’ll admit that listings titles (aka headlines) are totally controlled by the seller (after all they do apy for them) and some of them are not what you would call professional. But I will say that I believe the vast majority of listing titles are straight to the point and relevant. Note that economic Darwinism will be at play here. If a seller consistently uses odd listing titles and they negatively impact the seller’s business then it will be less likely you will see these odd listing titles. However, if the odd listing titles actually don’t harm or even improve the probability of a person clicking through on a listing, then do you really care if the listing titles are odd? Another thing I should mention is that the contextual matching system is not entirely dependent on the listing title to perform the keyword matching.

Contextual vs. Non-contextual: AdContext will actually let you create ad units that display listings that match keywords the publisher chooses. A non-contextual ad unit (sort of an oxymoron) is the result. Tom mentioned at the end of his comment how this is a good way of getting the “right ads without it being a ‘contextual’ system”.

OK, that’s it for the facts. I just wanted to give some general comments too:

I can’t comment on other company’s advertising system’s terms of service (TOS) but I hope you find AdContext’s TOS flexible. I know that at the end of the day publisher’s have to make an economic decision and pick the solution that monetizes the most efficiently for them.

Darren correctly points out that the 40-70% the publisher receives is not from the winning bid/BIN price but is from the revenue that eBay would take from the transaction. While his percentages seem small (the correct values are 2.6% to 4.55% using his 6.5% take-rate figure) a lot of eBay’s affiliates drive significant monthly revenues using this exact same payout structure. I’m not at liberty to disclose what they are though. But unlike other company’s we tell you up front what percentage of the revenue we are sharing with affiliates.

There are several comments about the effectiveness of the system and the number of clicks it would take to deliver a revenue generating event. At the end of the day I would say publishers are most concerned about how effectively they monetize their inventory of page impressions. It all depends on the average selling price (ASP) of the eBay listings that you send your site visitors to. AdContext could be equally lucrative for publishers in high-volume/low-ASP and low-volume/high-ASP models and in-between as well. Publishers whose content matches well with eBay listings are likely to be the ones who moentize the best.

I would also like to mention that as part of the eBay Developer’s Program we announced a new API call: getContextualKeywords. This allows developers to access the backend technology that powers AdContext and to develop their own applications that leveral our contextual analysis system. Whether your goal is to build another advertising solution or something unique our system will analyze URLs that you provide it and suggest contextually relevant keywords in a rank ordered list.

Thanks for reading, hopefully I’ve provided you the information you need to decide to try eBay AdContext (http://affiliates.ebay.com/ads/adcontext/).