Between the befuddling acronyms and analytics, the field of online marketing can be intimidating for small-business owners concerned with minimizing waste and maximizing return on investment. In an attempt to crack into the small-business market, however, some of the biggest companies out of Silicon Valley offer services for business owners that can put your products in front of millions of motivated buyers. Google, eBay, and Amazon all have advertising services that leverage their massive user bases and data mining operations to benefit small e-commerce outfits.
These services help you turn e-commerce into advertising by showcasing product listings to interested buyers — no clever campaigns, pricey ad agencies, or marketing slogans required.
EBay Promoted Listings
In late May, eBay launched Promoted Listings, which allow businesses with eBay stores to easily connect with eBay users who are searching for specific products. After joining the service, your products are displayed in prominent locations on eBay’s site — like the top of search results — depending on factors such as your chosen ad rate and how relevant the item is to a keyword search. It is a bidding system — the more you’re willing to pay, the more likely you’ll beat out others’ bids and win the best Promoted Listings spots for customers searching for products.
Unlike almost every other advertising service, though, sellers pay per sale, not per click. With pay per click, a sale is not guaranteed, yet the seller pays anyway. But with Promoted Listings, the seller only pays once a sale is made.
“The cost per sale (CPS) model developed for promoted listings holds eBay accountable for delivering the right traffic and placement to our sellers, and guarantees the effectiveness of our ads for shoppers,” according to a blog post by Alex Linde, eBay’s vice president of advertising and monetization. “We believe this is the right thing to do for the tens of millions of businesses that list and sell on our platform.”
Sellers set an ad rate for items, which is the percentage of an item’s price they are willing to pay to have it promoted (from 1 percent to 20 percent). When eBay bills you the ad fee, the company notes the time of the sale and looks back 30 days for the specific click leading to the sale. EBay will charge the ad rate that was in place when the ad was first displayed. This charge is on top of other fees from eBay, including the insertion fee (free for the first 20 listings per listing, than 30 cents per fixed-price listing) and a final value fee, which is 10 percent of the total amount of the sale — including shipping charges — topping out at $750.
With Google Shopping, you can reach an enormous user base. After all, Google handles over 3.5 billion searches every day. Google Shopping is the system that inserts product listings in a box near the top of search results. Search for “refrigerator” and, right at the top of the results, you’ll see pictures, prices, and other information (customer ratings, for example) about refrigerators from companies that sell them, like Sears and Home Depot.
With a recent push to support small businesses, Google Shopping is also concerned with displaying options from smaller-scale operations. By simply showcasing products to searchers looking up items, Google Shopping has helped many small businesses boost sales without launching an actual advertising campaign.
Small-scale bicycle retailer PUBLIC Bikes, for example, used the service to find customers far away from its brick-and-mortar store in Oakland, California. For each dollar invested in Google Shopping, the business saw twice the return on investment compared to other online channels.
Google Shopping charges per ad clicked on, but there is a lot of flexibility in pricing. Business owners set daily budget limits and can choose a cost per click as low as 1 cent. With Google’s budgeting system, Google Shopping could cost anywhere from $1 to $1,000 per day (Google recommends new users start small with daily limits of $10 to $50). Once your daily limit is reached, Google stops showing your products that day. The lower you pay per click also pushes your items lower in search rankings. On average, an advertiser using Google Shopping paid $11.30 for every $100 in sales, according to a study by e-commerce analyst firm CPC Strategy published in 2013.
Google’s reach is massive, and its helpful statistical tools and flexible pricing make Google Shopping attractive. However, you’ll still pay per click rather than per purchase.
Amazon Sponsored Products
Amazon is the largest online retailer in the United States, with hundreds of millions of active buyers around the globe. The company’s Sponsored Products service brings items in front of potential customers searching for specific products, much like eBay Promoted Listings or Google Shopping. Amazon, however, organizes searches based on product details instead of merchants, which is how Google and eBay structure their offerings.
If someone searches for “Rayban Wayfarer Sunglasses,” for example, a slew of choices for that product from many different sellers appears. Clicking on a specific item leads to a product page with the option to buy on the right side of the screen — this is called the Buy Box. If a shopper buys the item from you, you have “won the Buy Box.” By joining Sponsored Products, small businesses can improve their chances of closing sales.
Sponsored Products displays item listings alongside or below related search results. On product pages, the service shows listings under the “Sponsored Products Related To This Item” heading. This option is great for generating sales because it increases the chances of winning the Buy Box and it expands your reach by placing product listings in search results and on the pages of other items.
Like Google Shopping, Sponsored Products operates on a pay-per-click model, and sellers can set bid amounts and daily limits. The more competitive the bid, the more likely your product listings will get the best exposure. According to the CPC Strategy study, sellers paid $15.60 per $100 in sales on average.
This option brings you in front of Amazon’s wealth of shoppers when they are just a few clicks away from a purchase. However, competition can be intense for best placement and could mean you pay more per click to make a sale compared to Google Shopping.
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