Context t's hard to believe that one of the most well-known [Link] has now been established more than 20 years. Pierre Omidyar, a 28-year-old French-born software engineer living in California, coded the site while work- ing for another company, eventually launching the site 15 with the more direct ine cin Paden reports that the site name “AuctOM gitors In its first 24 hours. The site atractee oyin 1997. Atthe end of 2017 eBay had 165 = ee rrlion active in 2010. Nearly two-thirds of transactionsare now international. This shows how establish lished pureplays have continued to grow with global adopti ion of the web. This summary and others in the text are based on the e SEC filing of the business. The Securi eae eee oe eee deep, relatively hype-free insights on the main Stine platforms based in the US and is recommended for students studying these types of business to show the success and risk factors. Mission eBay describes its purpose as to ‘pioneer new communi- ties around the world built on commerce, sustained by trust, and inspired by opportunity’. eBay's 2016 report describes the company’s view on current marketing approaches of exploiting Big Data and Artificial Intelligence: ver the most relevant shopping experience, ue our efforts to better understand, organ- verage eBay's inventory. With our struc- tured data initiative, we are able to begin organising ‘our vast inventory around products rather than list- ings and aggregate insights into supply and ‘demand. We continue to broaden the coverage of structured data, which enables us to create and start rolling out new consumer experiences that are modern, simple and differentiated. One of our goals is to deliver a more personalised shopping experience by deter- mining what products to show our consumers and price and selection advan- ften provides across categories. gives To deli\ we contin ise and lel highlight the incredible tages that eBay 0 eBay is best known for its retail marketplaces, with a core mission to ‘create the world’s online marketplace’. Ints mest recent annual report, it describes its vision a to be present where people spend the majority of their tingontine, becoming part of the ‘fabric’ of their day 10- day online experience. Another marketplace owned by eBay is StubHub, one of the largest ticket marketplaces witha footprint of 48 countries. PayPal is also part of eBay, The Paypal business was acquired in 2003 but was repurchased at a later date and now trades separately. This case focuses on the best known eBay business, the eBay Marketplace. Revenue model : aS set sory of eBay's revenue Is for the listing and oh Baliga on completed sales. For PayPal purchases each aes ie cron fee is charged. The margin on structure is oe is phenomenal since once the infra- tea incremental costs on each transaction eBay is doing is transmitting bits and bytes Chapter 1 Introducing digital marketing 39 betwé Paes ee a sellers. To grow revenue, eBay has leveloped other site: Sega 3s such as comparison ne are StubHub (event tickets). aay has vertical formats, such as Cl il aa , Such as Classifieds, Daily 3 , Motors (vehi! eas. rane (vehicles, parts and accessories) mi ; gee also expanded into providing infrastructure for af retailers in 2011 with its purchase of GSI, a provider elie commerce and interactive marketing services ompassing websites and fulflment centres to enter- ates clients that include some of the world's leading ie and retailers covering merchandise categories cluding apparel, sporting goods, toys and baby, health and beauty and home. Advertising and other non-transaction net revenues represent a relatively small proportion of total net reve- nues and the strategy is that this should remain the case. Proposition The eBay Marketplace is well known for its core service, which enables sellers to list items for sale on an auction ot fixed-price basis, giving buyers the opportunity to bid for and purchase items of interest. Software tools are provided, particularly for frequent traders, including Turbo Lister, Seller's Assistant, Selling Manager and Selling Manager Pro, which help automate the selling process, the Shipping Calculator, Report tools, etc. Today over 60 per cent of listings are facil tated by software, showing the value of automating post- ing for frequent trading. An example of a new ‘Shopper feature that is part of its OVP is the eBay ShopBot oP Facebook Messenger. This uses Artificial Intelligent to provide a personalised shopping assistant that helps people find the best deals from eBay's one billion factor for eBay. To respond, eBay has developed ‘Trust and Safety Programs’, which are particularly important to reassure customers since online services are prone to fraud. For example, the eBay feedback forum can help establish credentials of Sellers and buyers. Every registered user Nas & feed- back profile that may contain compliments, criticisms and/or other comments by users who have ‘conducted business with that user. The Feedback Forum requires feedbaok to be related to specific transactions, and Top Seller status was introduced in 2010 to increase trust in the service. There is also a Safe Harbour data protec- tion method and a standard purchase protection system. ‘eBay has increased use 2009 as consumer habits accounted for 20 per cent of p listings. Fraud isa significant risk f of mobile commerce since have changed. Mobile urchases in 2014 and by40 Part 1 Digital marketing fundamentals the end of 2017 eBay related that more than 50 per cent of sales involved at least one mobile touch point. According to the SEC filing, eBay summarises the core messages to define its proposition as follows: For buyers © trust; © value; © selection; © convenience. For sellers * access to broad market * cost-effective marketing and distribution; ‘© access to large buyer base; © good conversion rates. 'n 2007, eBay introduced Neighbourhoods (http:// [Link]), where groups can discuss brands and products they have high involvement with, commerce experiment has now ended, In January 2008, eBay announced significant changes {0 its Marketplaces business in three major areas. fee Structure, seller incentives and standards, and feedback, These changes have been controversial with some sell- more specialised sites, such as Etsy’ ee Competitive factors today are listed as: © ability to attract, retain and engage buyers ay sellers; * volume of transactions and price and selection y goods; trust in the seller and the transaction; customer service; brand recognition; community cohesion, interaction and size; website, mobile platform and application ease-of use and accessibility; system reliability and security; reliability of delivery and payment, including customer Preference for fast delivery and free shipping and returns; * level of service fees © quality of search tools. Objectives and strategy ‘The overall eBay aims are to increase the gross merchant dise volume and net revenues from the eBay Market Place. More detailed objectives are defined to achieve these aims, with strategies focusing on: 1 Acquisition: increasing the number of newly regis tered users on the eBay Marketplace. 2. Activation: increasing the number of registered users who become active bidders, buyers or sellers on the eBay Marketplace. © Activity: increasing the volume and value of tensa tions that are Conducted by each active user on the eBay Marketplace, The focus on according to s Markets, each of these three areas will vatY trategic priorities in particular local in the marketplace, » Art, Books and Business & Indus lats for interaction: the traditional for "9S; but it has been refined now Now’ fixed-price format. This fixed @ccounts for well over half of all for example: Antiques, tal. Second, form, Mat is auction {i include the ‘Buy. Price listing now transactions, eBay Bey S growth Strategy In i ili me ae filings, success factors eBay believes a” © 2n2Ble itto compete in ts market incu: © abilty to attract buye, * volume of transact goods; TS and sellers; ao ‘ns and price and selectioncustomer service; brand recognition. According to its 2010 SEC filing: Our growth strategy is focussed on reinvesting in our customers by improving the buyer experience and seller economics by enhancing our products and ser- vices, improving trust and safety and customer sup- port, extending our product offerings into new formats, categories and geographies, and imple- menting innovative pricing and buyer retention strategies. Search marketing is a key technique for eBay to meet its aim to become part of the ‘fabric’ of their customers’ day-to-day online experience. If you search for ‘low-cost hair curlers’ or similar you will see eBay features both in the sponsored results (Google Shopping ads with images) and within the organic results. It also notes that in the context of its competitors, other factors it believes are important are: © community cohesion, interaction and size; © system reliability; reliability of delivery and payment; ‘© website convenience and accessibility; * level of service fees; © quality of search tools. This implies that eBay believes it has optimised these factors, but its competitors still have opportunities for improving performance in these areas, which will make the market more competitive. Chapter 1 Introducing cigital marketing 41 Updating brand positioning using tradit- ional media In an interview with eBay UK marketing director Gareth Jones in, Marketing Week (2016), he explained that: ‘We don't want to be defined by that online car boot sale repu- tation anymore. We need to get people to consider eBay in a completely different way. The UK is the petri dish for testing a new approach to rebuilding the brand globally. It is all about a shift away from the marketplace and over to being the ultimate shop.’ He is candid that a past focus on prioritising digital channels has had a ‘small impact’ on changing eBay's perception. Despite stating we're in an age of digital- based marketing, he believes TV is the best channel for brand building. This is based on regional tests in the ‘Summer that proved TV is the best place to get people to reappraise eBay as a brand: TVis still on fire and a wonderful medium to get neu- rons into people's brands in order to rewire their per- ceptions. Ifyou ask someone where they are shopping on Black Friday then TV is the best place to put eBay at the front of their consideration set. ‘Source: BBC (2006) eBay's 10-year rise to world fame. Robert Plummer ‘story from BBC News, 2 September, http//[Link]/go/pritr/-/1/ hibusiness/[Link] (accessed May 2018); SEC (2006) United States ‘Secures and Exchange Commission submission Form 10-K; eBay submis ‘sion forthe fiscal year ended $1 December 2007. Question Discuss how eBay has had to evolve its online brand proposition and communicate it to achieve contin- ued growth.