eBay Boosts Promoted Listings Dynamic Ad Rate Minimum To 5% With No Notice As Q4 Revenue Pressure Mounts
eBay is ratcheting up Promoted Listings dynamic ad rate minimum requirements during prime holiday shopping season as Q4 revenue pressure mounts.
The change was initially spotted by YouTuber and eBay seller Ebay Life, who says while investigating poor Promoted Listings ad performance, he noticed eBay had changed the minimum threshold to 5%, from the previous 2% requirement.
He said he believed the change may be specific to the UK, as a way to recoup some of the fee loss since eBay expanded fee-free selling to private sellers in most categories on the UK marketplace.
However, I've done some testing on the US side and am seeing the same thing he shows in his video - but it's important to note it only appears to impact the Dynamic Ad Rate option for Promoted Listings General (previously called Standard) campaigns.
eBay introduced Dynamic ad rate in 2023, allowing sellers the option to have their Promoted Listings ad rates automatically updated to eBay's daily suggested rates - with additional options to set either an ad rate cap (amount it won't go above, even if the suggested rate is higher) or an ad rate modifier (amount the rate is allowed to go above the suggested rate.)
Liz Morton
Using the Dynamic ad rate strategy is still completely optional for sellers, if they don't want their ad rates to fluctuate based on suggested rates, they can choose to set a Fixed ad rate instead.
And that appears to be where the change has occurred - fixed rate Promoted Listings General campaigns still have a minimum of 2%.
But the Dynamic Ad Rate option now shows a minimum of 5%.
It's not entirely clear when this change went into effect, since eBay has not made any public announcement about this change.
It's also not clear what impact it may be having on existing active campaigns that have the ad rate cap set to below 5%, though I suspect the answer is those ads may simply just not be delivered.
It may seem counterproductive to stop delivery of some ads rather than warn sellers to edit their campaigns, but remember - eBay doesn't particularly care which seller makes a sale and knocking Dynamic ads that aren't willing to pay at least 5% down in ranking tips the scales toward listings that are, making it more likely those listings will sell and eBay will collect a higher ad fee than they otherwise might have.
And that also means that while technically the minimum for fixed rate is still 2%, in practice if they are competing against dynamic rate ads forced into the higher rate, those ads will likely experience a loss in performance, setting the bar higher and making 5% the de facto minimum just to maintain minimum visibility even if it isn't strictly required.
Sellers are encouraged to review their campaigns and any recent reports in the ads dashboard to determine how their ad performance may have been affected and when the change occurred.
This change coincides with eBay's recent Q3 2024 earnings report, which disappointed Wall Street with weaker Q4 revenue guidance - largely driven by the fee changes and other consumer to consumer initiatives in the UK.
Liz Morton
That guidance sent eBay's stock tumbling last week, so it's not surprising they are acting swiftly to try to gain a Q4 revenue bump.
It's also sadly not surprising that they would look to do so on the backs of sellers with an unannounced increase to the minimum Dynamic ad rate.
Coincidentally, sellers have also been reporting a massive increase in suggested ad rates, with some even topping 20%+ - the highest I've personally ever seen.
the-hook-and-the-loop
They think I should consider promoting at 19.5% while I pay 13.25% in FVF's and I'll throw in the shipping charges and I'll even pay for the goods too. I'd like to also pay for a store subscription and some fries to go with that. Thanks!
I've heard of PL rates this high, but seeing this actual clip in black and white literally makes me want to puke - Though I don't believe it has anything to do with not be shy - This is way past being called out for being too gutsy -
In my humble opinion, the company's actions in sending this to a customer are repulsive, reprehensible, indefensible and immoral... chosen arbitrarily amongst a slew of similar words...
Meanwhile, eBay continues to desperately stuff as many ads as possible in as many places as possible, with over 300 ad slots on most listings, not to mention search, display ads, and increasing encroachment into buyer watch lists and purchase history pages.
It's been clear for quite some time that CEO Jamie Iannone has no real strategy for significantly growing Active Buyers and Gross Merchandise Volume (GMV) on the platform, leaving taking a larger piece of the pie from existing sales as the only real path for revenue growth - and this move just reinforces the desperate situation that eBay finds themselves in.
While it is not at all surprising, the lack of transparency and engagement with sellers on this issue is utterly appalling and Iannone, VP Global Advertising Alex Kazim and his entire team should be ashamed at pulling a stunt like this during the most critical shopping time of the year for many small businesses who are already feeling the squeeze both from eBay fees and larger macro-economic conditions.
How are eBay's off the radar Dynamic ad rate minimum changes impacting your business? Let us know in the comments below!
