Ebay’s blockbuster ad campaign fails to ‘move the needle’ on brand consideration

Ebay's 'Fill your Cart with Colour' campaign slow to deliver

Online marketplace eBay has ramped up its ad budgets in recent years culminating in the ‘Fill Your Cart with Colour’ campaign, but it has failed to deliver on key metrics such as brand consideration according to the company’s chief executive.

The push came as part of critical turnaround strategy following the split from PayPal where it was forced to slash over 2,000 jobs and restructure of a number of divisions, including sales and marketing.

The launched the global advertising campaign last year, first in the US before rolling it out to the UK last August and then Germany, France, Italy, Spain, and Australia.

The aim of the marketing push was to shed its image as the place to find second-hand goods and better compete against the likes of Amazon and Walmart by showcasing the breadth and variety of products people could buy.

Though the exact spend has not been revealed, the investment was significant as it ran across TV, radio, cinema, digital and social and sat at the heart of the brand’s tie-up with the Great British Bake Off on Channel 4 in the UK.

But, on its second quarter earnings update, chief executive Devin Wenig admitted that while the brand campaign “has been well-regarded externally” it hasn’t “materially moved the needle” on metrics such as brand consideration, which the company sees as key to customer acquisitions.

“I am really happy that we are investing and we are sticking to investing in our brand. Everybody that I have spoken to, from our customers to our investors, understands that we have an incredible brand, but one that can be easily misunderstood and it’s our job to close that perception gap,” said Wenig.

“But brands take time and when I look at the underlying metrics, what I am holding our brand spend accountable for is moving aided consideration and we are beginning to see aided consideration move. It hasn’t yet translated to our buyer growth number. I believe it will.”

The campaign was the first to come from ad agency 72&Sunny Amsterdam after it was appointed to lead the account in March 2017. At the time of the agency switch, it was reported the client spent over $100m in the US on measured media.

Wenig stressed that it would be “persistent” and wouldn’t “shut it off” because the campaign failed to “make an impact” this quarter.

“We will be back in market with new advertising campaign this quarter, while also activating multiple marketing channels in the second half of the year to drive traffic in buyer activity,” he said.

“You can expect us to light up our brand in the second half further. You can expect us to be active in all marketing channels and to plus that up along with the new product releases".

Marketing services revenue

When it comes to the revenue derived from its own advertising platform it faced similar challenges; though revenue grew 2%, this was a deceleration of two points versus the prior quarter.

It cited a continued reduction of “non-strategic third-party ad placements in favour of promoted listings” as the reason for the slowdown.

“Advertising, along with payments, is one of the most significant mid-term opportunities that we have. And the one that I would point at most strongly is promoted listings first party advertising,” Wenig said.

“Our growth trajectory is very strong. And when I look at the ratio of first party advertising on eBay, we are not even in the first inning. There is a lot of runway to grow that business and we are putting a lot of muscle into growing it. I do believe that it is a meaningful revenue stream.”

However, analysts are yet to be convinced.

RJ Hottovy, an analyst at Morningstar Inc, said “buyers on eBay are engaged, but they’re not bringing enough new customers to the platform.”

“They’re doing some interesting things, but it’s tough to compete with Amazon,” he added.

According to eMarketer, in the US eBay trails Amazon when it comes to online spend; 49.1% this year compared to eBay’s 6.6%.

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