eBay AdContext thoughts

If you haven't heard, eBay is developing an advertising system called eBay AdContext that is being touted as a possible competitor to Google's AdSense program. Like AdSense, AdContext will analyze page content in order to serve contextually-sensitive ads. Two important points:

• Since it's contextual, it and AdSense cannot coexist on the same page due to the restrictions in the AdSense terms and conditions. (They could be used as alternate ads, though.)
• Unlike AdSense, AdContext ads link back to eBay, not to random sites.

I'm curious to see how this will play out. Truth be told, I think eBay auction pages are sucky landing pages, so direct links back to eBay surely won't be as effective as linking to a dedicated page for the products being sold. But if the point is to get traffic to eBay that may not matter.

Speculation abounds that eBay will eventually expand the program to be a full-fledged AdSense competitor. I see problems with this:

• eBay's focus has always been to drive traffic to its auction site and to provide services (like PayPal) that are complementary to the whole auction process. An eBay-focused AdContext does exactly that, but a generic advertising program doesn't.
• Google still makes a significant chunk of its money from the ads on search pages, which is a piece that eBay lacks.
• Where's the incentive for publishers to switch away from AdSense or YPN or even the upcoming MSN ads?
• Google may decide to kick eBay out of its AdWords program for being a direct competitor in the ad market. Given that much of eBay's traffic comes from AdWords, this would be a major blow to the latter.

If eBay were smart, they'd do like Chitika does with its eMiniMalls and provide a non-contextual mode for AdContext so that AdSense/YPN publishers could use the two programs simultaneously on a page. But let's see what happens, details are still kind of vague.

Or, better yet, white-label the AdWords and/or AdSense programs and stay on Google's good side. Mind you, with Google creating services like Google Base that directly compete with eBay, it's not hard to see why they want to develop their own stuff. They do see to have a stormy relationship.

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Eric Giguere is the contextual advertising expert who wrote Make Easy Money with Google and Uncommon AdSense. You can read this blog by mail if it's more convenient for you, just send a blank email to memwg-blog@aweber.com to subscribe.

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