When companies begin to get really big and earn more money than they ever could have imagined, things can turn out one of two ways for advertisers. As an online company grows, so does its traffic and so does the reach that marketers can gain from advertising on the company’s page. With growth usually comes a lot of marketing on a site, as to increase revenue. However, there comes a point when a company grows much larger and much more profitable. It appears that eBay has reached this point, and is now deciding to reduce the amount of marketing it will include within the company’s mobile platform.
In an article by Tricia Duryee on AllThingsD, eBay’s president of Global Marketplaces, Devin Wenig, is quoted, stating that advertising on eBay mobile will be no more.
EBay is ecstatic about mobile, just not about mobile advertising.
Devin Wenig, eBay’s president of global marketplaces, said in an interview that next year the company will stop running mobile ads inside of its applications.
“We aren’t happy with the user experience and we don’t need the money,” he said.
“It’s not worth it,” Wenig added.
For a company to be able to say, “we don’t need the money,” during a seemingly endless recession is clearly a sign of the company’s confidence that success will continue for a long time. However, eBay has always had a different primary source of revenue than many other online businesses do. The majority of the money that make is from selling products online. This is one company that can absolutely afford to rid their mobile platform of any type of marketing.
“Some don’t have an alternative business model. In this case, it’s better to be lucky,” said Wenig, who, as the former CEO of Thomson Reuters Markets, knows all too well what it’s like to be in the other camp.
This is bad for marketers for clear reasons, one being that shopping is taking place digitally more and more often today, and mobile phones are starting to be a very popular shopping destination. There are always other places to bring your marketing dollars, but eBay is one of the biggest shopping sites on the web right now, and its mobile shopping experience among the top in popularity.
With eBay out of the mobile marketing world, we can only hope that other companies do not start ridding their mobile platforms of advertising simply because they do not necessarily need the money that it generates. EBay will remain quite relevant in the mobile shopping community, but for mobile marketers, the company will be essentially useless.
“For advertisers, this should be a reminder that there is still a lot of work left to be done to make advertising run smoothly across a range of mobile devices. EBay’s huge mobile audience should be attractive to marketers over the long term, but given that it was only conducting experiments for now, its decision to hold off on in-app advertising won’t be counted as a huge loss.”