Decoding & Analyzing eBay's Stated (leaked?) 2010 Marketplace Priorities...

by Scot Wingo, ChannelAdvisor


In the World of the eBay ecosystem, we have our own lingo that is deeply ingrained and we forget sometimes that people have no idea what we are talking about.

Over at the eBay Ink Blog, RBH posted a picture of eBay's priorities from a sign in an eBay building:

Ebay 2010 Priorities


It's titled "eBay Marketplace Goals 2010" and has these three called out goals and then 7 priorities. They are chock full of eBay lingo, so I thought it would be fun to a) decode them and then b) analyze them.

eBay Goals Translation

• Net Promoter Score (commonly called NPS) + 10 ppt - NPS is something I've been meaning to blog about for a while in detail as it has become core to eBay (as is clear from this goal) - it is a measurement of consumer sentiment and word of mouth. The goal here is to improve it 10ppt which translates to percentage points (not powerpoint slides, but that is kind of funny because eBay uses a LOT of PPTs).
• Bought Item Velocity + 6 ppt - This is interesting as eBay doesn't really have a metric publicly called 'bought item velocity'. Pure speculation, but they do have the 'sold item metric' as shown here in this graphic from their Q1 conference call. Perhaps this bought item velocity is a second order measure of sold items and they would like it to increase 6 percentage points y/y (from 31% to 37%).

Ebay Sold Items


• Market Share - Maintain - JD has stated numerous times that in 2010 as part of eBay's turn around they will grow 'with' e-commerce (vs. below -08/09 and above - 2011+), so I'm going to guess this is basically saying that eBay will grow with e-commerce. Sidebar - there's a growing disparity in e-commerce growth metrics. Comscore is coming in very bearish with single digit growth and the US dept of commerce is at 14.3% - comscore is the easier metric and if you use that, eBay is at their goal, if you look at the USDC, they are not there.

eBay Priorities Translation

The sign lists 7 priorities along with the three goals:

• "Retail-like" trust levels by reducing BBEs and protecting buyers- BBEs are Bad Buyer Experiences, kind of like the Amazon ODR (Order Defect Rate). Inside of here you have all kinds of things that can go wrong like (SNAD - Significantly Not As Described, INR - Item Not Received, etc.) all of which result in a claim or low NPS score, or the dreaded 1/2 stars of death.
• Enhance selection and value in CSA - CSA is the acronym for the Clothing Shoes and Accessories (now rebranded Fashion) category. More on this in the analysis section.
• Deliver value across the site - Great deals across the site.
• Scale B2C sellers and improve efficiency - B2C (business to consumer) sellers probably refers to the larger merchants that are coming into the system like buy.com, disney, etc. Scaling them means helping them grow much larger. Deal of the day is one lever for this, perhaps there are more to come.
• Defend C2C seller business - C2C are consumer to consumer sellers - a.k.a. 'small sellers' or 'casual sellers'.
• Improve the eBay buyer experience - Self explanatory
• Build our advertising business - ?! More on this in analysis.

eBay Goal and Priority Analysis

Let's start with the goals (NPS, Bought Item Velocity and market share) - these are all good and very much in line with what eBay has been telling Wall St. as well as sellers. It is a bit of a bummer to see that the "Market Share" goal is "Maintain". While realistic, that's a hard one to get the troops rallied and definitely not in the Meg Whitman realm of a BHAG that she seemed obsessed with. However, in context of losing market share for the last couple of years, it's definitely a step up.

The priorities are not what I would expect. First let's think about the order of these. (buyer satisfaction, CSA, value, big sellers, small sellers, buyer usability, ads). Personally, I worry that the buyer experience on eBay is so outdated that it will become increasingly hard for them to keep market share for the next 5 years if they don't make this a priority. I guess you could argue that CSA is where they are doing some pioneering, but the fact that buyer usability is goal number 6, right above ads, makes me nervous. Personally, I'd say they need to do this order (FIX SEARCH, buyer usability, buyer satisfaction, big sellers, small sellers, CSA) Yes I left ads off and added search in all caps ;-).

(rant on)

Ads? It is disconcerting to me that eBay has ads on here. I hope I'm misguided, but I'm assuming this is something like AdCommerce and ads on the site and not eBay classifieds (not part of marketplaces). eBay should focus on GMV and not ads. Period.

Personally, I find the AdCommerce ads program to be terrible from all angles:

• Sellers - There is no way to measure closed loop ROI of the system. It's 2010, I can't imagine why anyone would pay for clicks and not know if they turn into conversions in this day and age. We do not recommend sellers use the program for this reason alone.
• Buyers - Google is able to show so many ads on the sight because of one reason - relevance. Google is religious about making sure ads are as relevant as possible. When they do that, it results in a BETTER experience than just organic results because the ads enhance the experience. From a buyer's perspective, the only good thing about the AdCommerce ads are that they are at the bottom of the page and hopefully consumers don't see them very often. I've found they are a HUGE step backwards in the buyer experience because 99% of the time they are not relevant. Here's a great example. I just did an iPad search and I am presented with these three ads: (click to enlarge)

Ipad Spam


Scanning the pictures, you may think I'm off-base, they seem decent. But dig a tad deeper. The first ad, while it has a picture of an iPad, is actually for a Arwen evenstar pendent (all my LOTR peeps) will appreciate this, but not your average IPAD SHOPPER?! Really!?!

The second ad seems decent - someone has an iPad on sale with free shipping - ok, very relevant - I click through and find that, well, that's not really the 'case', it is a case and not an iPad - a clear decision by this advertiser to mislead the buyer. This ad would last about .00000000000000000000000000000001 seconds on Google, yet here it is happily spamming up the search results for one of the top products.

The third ad is at least clearly an ipad case (at least the image says IPAD CASE). The ad says: "Best Deal Here and "reat (sic) Deals starting at $.99.....". Again, this ad would not last a second on Google, yet here's an ad with a typo.

So let's recap: Three ads: one is nothing like what we are searching for, second is misleading at best and the third has a typo: Useless Consumer Spam: 3, AdCommerce: 0. Spam wins!

Finally, eBay seems to let anyone advertise in this program. Featured listings got a LOT less spammy when they restricted the program to eTRS, they should at least do the same here and in fact, I don't get why you wouldn't just put a bullet in the whole program - it really is just that bad.

(rant off)

CSA? In the Q1 conference call, JD said this of CSA:

"So we are starting from a strong position as the number one clothing site based on sales and traffic and we begin to expect traction from these initiatives in Q2 and beyond. In fact, we expect to generate more than $5 billion in GMV from clothing, shoes and accessories."

So it seems like eBay has decided this category is an area they a) are top and b) want to stay top. This is great and it's good to see them getting aggressive, especially in light of Amazon+Zappos that is a counter force in e-commerce CSA. My only concern is that they neglect the other 10 billion dollar categories on eBay. They kind of capture this with the 'deliver value across the site' priority, but would it be prudent for eBay to win the CSA battle and lose autos, CE/CMP, sporting goods, home+garden, jewelry, toys, collectibles?