EBay has decided it wants to sell ads in its mobile apps after all.
EBay tested ads in its mobile apps in 2012 but decided the revenue stream wasn't worth the trouble. So last year it removed those in-app ads. Now it's putting them back.
"Two years ago we didn't think mobile advertising was very good, for the marketer or the user. And as an ad guy, I didn't think the CPMs [ad prices] were very good," said eBay head of North America display advertising Stephen Howard-Sarin.
EBay has done away with the standard mobile banners and will add a new so-called "native" ad to its mobile apps in the fourth quarter of this year. These ads will show up within the product feeds in eBay's mobile apps as well as on its home screen, but Mr. Howard-Sarin declined to offer any details on what the ads would look like beyond describing them as "flexible format graphics" that will adjust in size to a device's screen.
"I don't think we're prepared to show the ads except to our customers," Mr. Howard-Sarin said.
EBay has reached out to its 22 biggest advertisers to brief them on the ads. It's also begun advertising the new offering (including on AdAge.com).
Geico has signed on to run the ads when they debut next quarter, but Mr. Howard-Sarin declined to say how many other advertisers have signed deals. EBay's new in-app ad is directed at big brand advertisers and is "not aimed at sellers on eBay," he said.
While unwilling to discuss the ads' appearance, Mr. Howard-Sarin was willing to talk about how they'll be distributed. First the ads will run across eBay's smartphone and tablet apps and will take advantage of being cross-device. That means eBay and its ad-tech partner Triad Retail Media will be able to target an ad to someone using its smartphone app based on that person's browsing behavior in its tablet app or on eBay's desktop site. And eBay will taking advantage of its registered user data to further pinpoint the ads.
"Because you're an eBay registered user, we know who you are, what you're searching for, your saved lists, your past purchases. All that behavior that allow us to personalize the eBay experience for you," Mr. Howard-Sarin said. EBay started using that data last year to let advertisers target display ads across its own and others' desktop sites as well as ads in third-party mobile apps, video placements and ads on Facebook. The company, however, does not sell or license its user data. "Now we've set the stage to do it in what we think of as the main stage: our own commerce apps," he said.
EBay plans to limit the new in-app ad to its own mobile apps, but Mr. Howard-Sarin said the eBay Commerce Network, another part of the company's ad business, "is working on a much more contextual ad placement...aimed at retailers, not brand advertisers" and that ad unit may eventually make its way to mobile.
EBay doesn't break out how much money it makes from advertising in its quarterly earnings reports, and eMarketer was unable to provide an estimate for the business.
EBay's advertising business rolls up into the company's "marketing services and other" category in financial reports, which also includes revenue from classifieds. That segment generated $450 million in revenue in the second quarter of this year and $1.7 billion last year.