EBay shuts down Commerce Network to focus on first-party advertising
- EBay announced plans to discontinue its Commerce Network on May 1 in an effort to shift its reliance on third-party advertising to first-party advertising, according to a company blog post.
- The move comes as eBay is emphasizing other ad efforts, like affiliate marketing and advertising on the eBay platform, according to a TechCrunch report. The platform's goal is to increase ad revenue to $1 billion in 2019 from $600 million last year.
- EBay said it would issue refunds to merchants with balances on their accounts and pay out balances to publishers. Its other products remain, including Promoted Listings and the eBay Partner Network for publishers, which covers more than 1 billion listings, but merchants will need to sell directly on the platform rather than via third-party websites, according to TechCrunch.
EBay shutting is down its Commerce Network as the company works to boost its own shopper database and grow its ad business. The news is the latest indication that third-party partnerships have lost some of their allure for digital platforms at a time when issues like a lack of transparency, brand safety and data privacy are top of mind. However, questions remain over whether eBay has enough merchants on its site to grow its first-party ad business and whether it can attract new advertisers, per TechCrunch.
The site is hoping to get noticed by marketers amid the growing competition from e-commerce giant Amazon, which is snapping up more of the digital ad share. Amazon’s ad business is expected to grow more than 50% this year, according to eMarketer, as it continues to encroach on Facebook and Google. Marketers are attracted to Amazon for the ability to target consumers at various stages of their shopping sessions and the wealth of consumer data the site can offer. EBay likely hopes to attract advertisers in the same vein. Walmart is also building up its advertising efforts and Target is going down the same road.
Digital platforms are reconsidering the value of third-party partnerships as some of the biggest players, like Facebook and Google, come under scrutiny for gaps in their large and unwieldy operations that may be putting consumers at risk. Still, marketers continue to invest in third-party data, with hopes of uncovering key details about consumers and more effectively targeting messages and delivering personalization. U.S. companies were projected to spend nearly $19.2 billion in 2018 on third-party audience data and solutions, a 17.5% increase over last year, according to IAB research. Programmatic advertising is driving some of the growth of third-party ad spend.