In May of this year it became apparent that eBay had been hit pretty severely by a Google search penalty of some type. The initial speculation was that eBay had been hit by Panda 4.0, but later reports claimed it was actually a manual action. Whether it was Panda, a manual penalty or some combination, the impact was significant enough to eBay's bottom line that they have addressed it on their subsequent quarterly earnings calls as a factor that is weighing on their growth rate. The Google penalty may have also prompted eBay to reconsider its status as a Google search partner. Within a month of the penalty reports, RKG found a large volume of eBay search ad clicks starting to take place from ads served through the Bing Ads platform instead of Google AdWords, through which they had been served for years. Interestingly, the traffic that has moved to Bing appears to be exclusively mobile, with desktop ads still serving through Google's search network program. Like many other large retail sites, including Amazon and Walmart, eBay has a long history of running search ads at the bottom of its search results pages as one way to monetize the huge amount of user queries they produce. It was a pretty big blow to Yahoo five years ago when eBay originally dropped their ads in favor of Google's, and now it's Bing that stands to benefit from one of the largest search partners around making a bold move.
eBay's Impact on Bing Ads MetricsBecause of Bing's smaller volume, the influx of mobile eBay traffic stands to move the needle a lot more for them than the loss of it will for Google. Over the past few quarters we have seen just that. From Q1 to Q3 the share of ad clicks Bing produced from mobile devices increased from 25% to 36% on average, thanks largely to the addition of eBay's mobile searches. Over the same period, Google's mobile click share has been flat at around 38%. Had they kept eBay as a search partner on mobile, Google's mobile click share would have continued to rise. The eBay traffic is also skewing Bing metrics in other major ways. eBay generates a huge amount of queries on its site, but the vast majority of its users have no interest in clicking on the search ads that run all the way at the bottom of eBay's listings. As a result, eBay produces tremendous impression volume, but at a very low click-through rate (CTR). For sites we looked at, eBay now accounts for 50-90% of all tablet impressions for Bing Ads and 30-60% of phone impressions. But eBay's share of clicks for either device class is in the mid-single digits. Thus, CTR on Bing Ads has taken a huge hit from the addition of eBay traffic overall -- we see it as being down around 25-30% Y/Y -- and especially on mobile. This isn't necessarily a bad thing, but it's helpful to understand the real cause here so that advertisers don't go chasing phantom problems with their Bing ad copy or the like.
What Action Should Advertisers Take?Much more important than eBay's impact on Bing CTR, is the impact it could have on Bing conversion performance. Historically, eBay traffic has performed pretty poorly for advertisers in comparison to traffic on Google, Bing, Yahoo, and even other search partners.
Is This Hurting Google?Google's official performance numbers in Q3 were generally considered a disappointment in Q3, with slowing click growth particularly worrying their investors. Losing eBay's mobile search volume certainly isn't the whole story here, but it also didn't help. At least among retail advertisers, eBay's search ad click volume is on the order of 1% of that of Google.com. The mobile piece that Google lost to Bing is a third to half that. So it's a small percentage of total search volume, but even small percentages in paid search share can reflect hundreds of millions of dollars in yearly revenues. For advertisers looking to understand how this development has impacted their overall Google paid search performance, they will generally find the opposite of what they are seeing on Bing, albeit to a lesser degree: Google losing all of those low CTR mobile eBay impressions has helped drive up CTR for AdWords programs. Mobile search share hasn't risen as fast for AdWords as it would have otherwise. And so on. To close, there's certainly a chance that the timing of eBay's move is purely coincidental and there may be other good reasons for them to make the switch, particularly on mobile. At RKG we find that Google's average CPCs do run higher than Bing's on mobile devices, but I wonder if that's the case across our industry. I have to imagine that there's a lot more attention given to mobile efficiency on Google than Bing and it could just be that enough advertisers are bleeding cash on Bing mobile ads that the CPCs eBay can get there are more attractive.
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