EBay is working to understand the impact Promoted Listings has on a buyer on the marketplace, as it begins to think about creating what it calls "floating slots" in search results pages. The company said it plans to invest in its algorithms to improve the quality and relevance of promoted and non-Promoted Listings at top of the search page.
Understanding the impact provides a major “step toward surfacing PLs in floating slots on Search Results Page,” Shreya Raval, product lead for search ranking at eBay, wrote in a post along with eBay applied researcher Yi Liu, and eBay senior applied researcher Gajanan Adalinge.
Most marketplaces have Promoted Listings in fixed positions. Sellers on eBay can pay an additional ad rate fee to make their item stand out among billions of listings in the marketplace. When a seller opts into the program, their item shows up as sponsored on search result pages at a higher ranking.
Colin Sebastian, Sr. research analyst at Baird Equity Research, maintains an outperform rating on the stock.
“In addition to the broader strength in overall ecommerce, we note that eBay continues to spend incrementally on customer acquisition/promotions, which may be helping to sustain higher volume levels,” he wrote in a recent research note.
“Overall, we remain comfortable with our above-consensus FY20 revenue and EPS estimates for eBay, given the ongoing strength in our tracker, the company's efforts to sustain higher levels of buying and selling activity among both new and repeat users, as well as opportunities to improve marketing efficiency,” he added.
The Promoted Listings program has grown more than 100% during the past two years, eBay estimates. Implementing a unified ranker for both non-promoted and Promoted Listings has driven the most growth.
Prior to the new unified ranking, PLs and organic search results were served on the Search Results Page (SRP) from two different tech stacks with different underlying algorithms, which the company says resulted in a “sub-optimal buyer experience.”
The outcome means some PLs appeared in fixed slots. The queries with poor quality PLs served up as irrelevant or low-quality results in those fixed slots.
The factors rank promoted items through several factors, such as relevancy to the search term, seller’s past performance and the ad rate the seller has set for the item.