eBay goes deeper into ad targeting

This post has been revised from its original version, and has been updated to include a more accurate description of eBay’s ad targeting program and data-sharing policy.

eBay is getting deeper into the lucrative world of ad targeting, following in the footsteps of e-commerce giant Amazon and giving retailers more options to advertise to online consumers.

E-commerce sites possess huge volumes of data on customers that help companies refine how to target their ads by tracking what items customers buy and browse through. Amazon was one of the early masters with ad targeting, and San Jose-based eBay is positioned to rival it.

The company recently announced it had begun testing a new advertising program that uses the data eBay collects on its customers to develop targeted ad campaigns for third-party companies. How it works: eBay takes orders from advertisers about who they want to sell their products to and where, and will use the mounds of customer data it keeps to orchestrate the advertising campaign. eBay says it doesn’t share the data with advertisers, but this new program lets retailers and other companies better market products to eBay buyers and sellers.

The program is still in a pilot phase, but it opens up a new treasure trove of advertising revenue. eBay get a kickback for every click the ads get.

The good news for eBay shoppers is that they don’t have to be interrupted every 30 seconds by a banner ad. eBay uses AdChoices , a program that lets customers know when information is being gathered about them for advertising. The program sticks an AdChoices icon on the webpage, and by clicking on that icon, consumers can opt out of the targeted ads.

Privacy and ad targeting are sensitive consumer issues that have tripped up many online companies — just look at Facebook. eBay says it doesn’t share consumer data without first getting consent, but the company doesn’t keep all your information under lock and key. The new user agreement that took effect last month lets eBay share customer contact information with affiliated companies and vendors, such as collection agencies, unless users take steps to opt out.

Ad targeting seemed the inevitable next step if eBay wanted to continue its furious rate of growth and rival Amazon as the most powerful e-commerce company in the world. The aggressive plan eBay laid out last month calls for more partnerships with local retailers and a bigger buy-in from powerful retailers like Target and Toys ‘R’ Us.  Better access to customer data is what those retailers want.

Just to prove how serious it is about its foray into ad targeting, eBay announced Tuesday it has hired its first-ever vice president of customer optimization and data. In his new role, Zoher Karu will run the company’s digital marketing strategy and use eBay’s customer data to better tailor digital ads to shoppers’ interests. Karu is a former marketing chief at Sears, where he was in charge of the retailer’s digital marketing efforts.

Heather Somerville Heather Somerville (215 Posts)

Heather Somerville is a business reporter covering venture capital and startups for the Bay Area News Group.