How eBay gets the most from its online advertising

In a recent conversation with Daphne Liska, a six-year eBay veteran who manages the company’s online display advertising, I gained some new insights into what makes eBay’s program so effective. There are three keys applicable to online merchants and marketers of all types.

1. Improved results have come from rigorous testing using the right metrics. Beginning in 2005 the company moved from evaluating online ads purely on click-through results to incorporating passive response metrics. To capture the passive impact, control groups are served charity ads or some other non-eBay message, then they are compared to a test group that is served an eBay display ad. Through this process a view-through multiplier is established by market and by campaign, allowing eBay to better hone its online display ads, leading to increased revenue for the company.

2. eBay’s best-performing banners incorporate live auction items to increase relevancy and urgency. This process of linking to real-time data, while technically a challenge, has led to ads that consistently outperform those with general messages or calls-to-action. Roll over the sample ad included here to get an idea how the concept works.

3. eBay’s most efficient media buys are retargeting campaigns based on the behavior of visitors who have previously viewed the company’s sites. The sophistication of eBay’s cookie-based program is impressive and incorporates relevant customer data. Customers always have the option to opt out of being cookied, but so far the customer experience has been positive enough to maintain a low opt-out rate. This retargeting approach has been superior to other forms of behavioral targeting, which carried too high a CPM premium.

Keep an eye on what eBay is up to in the next year. While it has an advanced program now, the company is not finished innovating yet.

Are you innovating with online advertising creative or media approaches? Let me know what you are learning.