EBay Opens Contextual Ads for Affiliates

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EBay's new contextual ad program for affiliates will help the company and its retailers further monetize traffic.

AdContext, which eBay executives announced at the eBay Developers Conference in Las Vegas June 10-12, lets retailers and Web operators add a code to their sites so relevant eBay links appear on the non-eBay sites.

The ad program is set up as revenue sharing, as eBay's affiliate sites receive 35 percent to 60 percent of eBay's referral payments when someone who clicks on the link purchases the product, according to reports.

Search marketers and consultants see the program as a way for online retailers to gain revenue share. For example, a sports memorabilia Web site could show relevant eBay auctions for baseball cards and other collector items, said Matt Booth, program director, interactive local media for The Kelsey Group, a research and analysis firm in Princeton, NJ.

In particular, smaller retailers that cannot spend a lot on search and online advertising will benefit, said Tim Kauffold, director of business development for search marketing firm Oneupweb, Lake Leelanau, MI.

"The name 'eBay' is going to get credibility and recognition right away," he said.

AdContext is another expansion into e-commerce by eBay, which aims to transform from an auction site to an e-commerce site, eBay CEO Meg Whitman said at last week's eBay Live conference. To that end, eBay and Yahoo said they were partnering on search and advertising in late May, including a co-branded toolbar and the probable development of a "click-to-call" service.

The new program also helps eBay compete with some of the major search engines' ad programs.

"EBay is borrowing from the successful strategies of Overture [now Yahoo Search Marketing] and Google," Mr. Booth said. "The program seeks to mimic the success that ad networks have achieved by creating distribution deals with third-party Web sites."

"Retailers would possibly move [some of] their budgets from Google and Yahoo and put them on eBay," said Samir Patel, president/founder of search marketing firm SearchForce, San Mateo, CA.

The system also may be more efficient for advertisers than Google and Yahoo contextual ad programs because revenue is shared only when a purchase is made from a click, not every time a user clicks on an ad, Mr. Patel said.

"The big gorilla in the room is click fraud," he said. "With [this program], there is no issue with it."

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