eBay has been shifting its advertising efforts away from non-strategic third-party ad placements toward the company’s first-party Promoted Listings product, and it seems to be paying off. The marketplace on Tuesday reported $2.6 billion in revenue and adjusted earnings of 67 cents per share, beating analysts' expectations of $2.58 billion and earnings of 63 cents a share.
Devin Wenig, president and CEO of eBay, during the earnings call said the company’s initiatives to create a next-generation payment and advertising experience for the marketplace are on track. It will contribute to the $1 billion in revenue from advertising, he estimates.
“We delivered a solid first quarter, driven by healthy buyer growth, strong advertising performance and disciplined cost control,” he said, as if to prove the company is on track to make a comeback against rival like Amazon.
Ben Schachter, analyst at Macquarie, noted in a research note that the company is performing well against “muted expectation,” with a Neutral rating, making progress with advertising and payments.
Revenue from Sponsored Products rose 110% to $65 million in the quarter.
eBay, which is reducing the amount of third-party ads it uses across the marketplace, grew its promoted listings placements during the first quarter of 2019.
More than 800,000 active sellers participated to promote listings, promoting more than 200 million listings. This drove more than $65 million of revenue in the quarter, up nearly 110% year-over-year.
U.S. sellers now see an average boost in visibility of 36% when using the first-party advertising offering, according to the company.
eBay launched Google Pay in early April. During the quarter the company also completed the integration of PayPal on its new platform, which has been live for a few weeks with a handful of customers.
The company said it added $363 million of gross merchandise volume (GMV) with more than 4,300 active sellers who have opted into the program. By the time of its full rollout in 2020, eBay hopes to build this into a $2 billion revenue opportunity it can grow.