How eBay is building server-side ad tech to chase ad budgets

EBay wants in on a part of the ad tech game that’s allowed rival Amazon to profit from the number of programmatic bids moving to the cloud.

The company is building server-side ad tech so it can sell its own media. The pitch is to show advertisers that it can sell their ads in a fair auction because it owns the server, rather than having to trust an independent vendor to do so. In this type of auction, which is referred to as a unified auction, no one bidder gets preferential treatment, thus ensuring bids win based on their strength, not on preference. This is slightly different from Amazon’s server-side ad tech, built on aggregating demand for publishers.

The migration of bids to server-side technologies owned by the likes of Amazon, and now eBay, took some time to catch on. For all the money hosting auctions on a server makes for publishers, advertisers can’t always see the upside when their bids end up in servers they have no view into. But those concerns have been eased to a degree — and now that there’s a growing acceptance of those solutions, eBay is making moves of its own.

For buyers, the advantage of a server-side setup like eBay’s is the potential to understand how much each impression is worth and its relative placement on the site. Having to wade through data to find the optimum supply path to an impression requires expertise that not many ad buyers have the scale to do.

“We want to share more information with our buyers around what’s working better for them in our programmatic auctions and we want to help them become more efficient in how they spend with us,” said Phuong Nguyen, eBay’s gm for advertising in Europe, the Middle East and Africa.

He declined to say what information would be shared but did not rule out giving the supply-side platforms and demand-side platforms that plug into its server-side ad tech access to auction-level reporting. Reporting like this usually includes metrics such as earnings, eCPM, bid rate, win rate and timeout rate by SSP, and subsequently allow the media owner to maximize the rate for its inventory.

“The intent of our server-side technology is to be more transparent and more collaborative with our advertising partners and that may mean more information and detail on how auctions and inventory are sold and managed,” said Nguyen.

He wouldn’t name the ad tech vendors supporting eBay’s server-side ad tech while it’s being built. He did, however, say the company has spent more time working with SSP partners to date. If eBay is able to pair its server-side ad tech with the SSPs that handle the most bids, the more demand and subsequent yield it will have for its programmatic ads.

The server-side ad tech is being rolled out worldwide now, though won’t officially launch until next year. Eventually, it will manage all eBay’s programmatic bids, said Nguyen. Should the move server-side make money selling eBay’s own ads then it could use the ad tech to handle auctions for other publishers similar to tech platforms like Amazon, said Nguyen.

“Our aspiration is that the server-to-server platform we’re building is going to be at the core of eBay’s advertising infrastructure for many years to come,” said Nguyen. “It’s the way we believe we’re going to truly unlock the value that comes with accessing eBay’s wealth of shopping insight.”

EBay’s ad infrastructure is being prepped with one eye on how shopper marketing budgets are moving online.

Between advertisers merging their marketing and sales teams and agencies building e-commerce divisions and advertisers merging their marketing and sales teams, more money will be spent on sites where products are both bought and promoted. That money is coming from shopper marketing budgets that advertisers like Procter and Gamble and Adidas would’ve previously spent on in-store promotions.

“As the worlds of programmatic and shopper marketing start to converge, I’m excited about working with some of our biggest partners, whether that’s our agency partners or on the brand and merchant sides, to figure out how we start to bring some of those disciplines more closely together,” said Nguyen.

Nevertheless, eBay has its work cut out growing in a crowded ad tech space. The marketplace is seen as more of a media owner, rather than an ad tech vendor,

“There is a lot of search data which would interest brands; however, the perception is still that eBay is aimed at a pre-owned, discount audience, which may put off some brands,” said Olumide Gomes, programmatic director at MC&C.

EBay has made moves to change those perceptions as it swings its business model further into advertising, including taking its ad sales in-house in September and focusing on monetizing its shopper data and tech integrations.

Much of the revamped sales pitch is around how eBay can use its shopper and auction data to coax advertisers into more premium buys. It’s a similar pitch to Amazon’s, and ad buyers aren’t sure there’s enough room at the top of media plans for both.

“I’m not thoroughly convinced that transparency into the auctions will be enough to shift the needle to turn eBay into the dominant player in the commerce space” said Gomes. “Brands are really invested understanding and finding the best audience for their marketing messages for which data plays a key role, especially those which are performance-focused.”

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