Amazon, eBay, Google and Facebook – What are they saying about eCommerce media?
As the 4Q17 earnings season is about to end, and following our last post about the brand’s perspective, we thought it could be a good opportunity to check how these four big companies relate to eCommerce media.
Here are some highlights and notes taken from their recent earning calls.
Generating higher ecommerce media revenues by selling more Sponsored Product Ads on the account of third-party ads
“Our first-party advertising revenue continues to pick up momentum. Nearly 160,000 sellers use promoted listings to advertise over 100 million items in the quarter, driving over 50% sequential revenue growth in Q4. The rapid growth of promoted listings is enabling us to shift away from non-strategic third-party advertising.”
“We continued to shift our advertising efforts away from nonstrategic third-party ad placements and towards our first-party promoted listings product. This will favor transaction revenue putting ongoing pressure on MS&O revenue growth.”
“On promoted listings, yeah, first of all, we’re delighted. This is probably the fastest growing new business, for lack of a better term, launched in eBay in years. And as I said, 50% sequential revenue growth quarter-on-quarter, that is quite significant.”
“Most of the driver has been surface area. We are increasing the surface area of availability to sellers. We’re increasing the surface area of the exposure of promoted listing to buyers.”
“when talking about surface area, the other thing worth mentioning is that we also started offering these on mobile. And so, it’s been out there a little bit, but it’s started to scale. And so, we started to really increase the surface area.”
Speakers: Devin Wenig and Scott Schenkel
The win-win-win of e-commerce media: The store, the shopper and the brand (or seller).
“Advertising was also a key contributor as we’re continuing to make more value — the offering’s more valuable, both to customers and advertisers alike, and that was particularly strong in North America”
“And on advertising, I would say our strategy is to make the customer experience additive by the ad process. We want customers to be able to see new brands and have easier time discovering products that they’re looking for. “
“For brands, we think the value proposition is that we can find ways for them, especially emerging brands, to reach new customers. So, we’re working with advertisers of all types and sizes to help them reach our customer base and the goal of driving brand awareness, discovery and better purchase decisions by the customer.”
“We’re really just focused on finding ways to work with those companies, whether it’s vendors or sellers that are coming to us and offer them a great experience on the website and ability to be able to reach customers. So, I think there’s more to come on that side. “
“As we said, we’re definitely seeing some strong growth in our advertising revenues. And I think we’re going to keep building more and new tools based on what we’re learning from our customers there to better serve in the future.”
“I think we’re also point of a key lien in from brands and agencies into the e-commerce marketing space. So, it’s other side, search or social marketing, it’s really helping them engage customers on a high, efficient, highly efficient manner.”
Speakers: Brian Olsavsky and Dave Fildes
Something is indeed happening with eCommerce media. Don’t worry, we are on it.
“Question: There is often speculation and question marks around how consumer behavior is changing in ecommerce … Could you just talk to what you are seeing in retail search query volumes and search user growth within ecommerce in the United States?
Answer: Overall, look, we — obviously Search is very broad … You are right, consumer behavior is changing but we are comfortable given the breadth of how we do things and how we are focused on user experience there.”
Speaker: Sundar Pichai.
“Question: Just hoping you could help us think about how marketing budgets grow as retail moves online. So, investors we speak to ask the question about the addressable market. Is the addressable market running out of opportunity as the platform gets larger? So, do you believe the overall ad market, or the TAM is possibly experiencing structural expansion, due to a shift in e-commerce overall?
We continue to think we’ve got great opportunities to grow in the large global advertising market. When you get sort of down to the micro level, you talked about e-commerce.
E-commerce is and remains and was one of our strongest verticals in Q4, and we think we’re doing an excellent job of building the right products for e-commerce retailers.
I think we’ve got continued opportunities with e-commerce going forward. So, I think we’re very well positioned in the e-commerce space.”
Speaker: David Wehner
So, we see that the ecommerce media owners (eBay and Amazon) are enjoying the growth and the shift of advertising budget to their platforms.
However, it looks like Google and Facebook didn’t really answer the questions that they were asked.
Facebook talked about retailer’s budget which is nice but avoided talking about sellers and brand manufacturers that are shifting budget to eCommerce media.
Google admitted that there is a change in consumer behavior in ecommerce and that they are comfortable with it, but they didn’t really share why they are so comfortable.
Will eCommerce media join the duopol of search media and social media turning it into a three party game and taking a significant portion of the advertising budgets?
In China it happened 2 years ago.
Source: The Drum
In fact eCommerce media surpassed search and social in China and it is now the leading advertising channel in the country.
As advertisers become more sales oriented and performance driven, eCommerce media will definitely take a bigger chunk of their budgets.
It’s a matter of time.