From the eBay Enterprise site
Last summer, while attention was focused on eBay’s PayPal sale, the online marketplace was also spinning off its eBay Enterprise unit.
Earlier this week, the new standalone company eBay Enterprise Marketing Solutions announced it had purchased AffiliateTraction. This comes on top of eBay Enterprise’s acquisition in November of performance marketing firm Digital Net Agency (DNA).
We checked in today with the CEO of the new eBay Enterprise Marketing Solutions, to see what the new vision was.
“It’s been a wild couple of months,” Michael Jones told me.
The Last Few Months
But first, let’s review those other eBay Enterprise sales and acquisitions that have created the company’s current shape:
Largely propelled by its purchase of GSI Commerce in 2011 for $2.4 billion, eBay’s eBay Enterprise originally had dreams of getting closer to larger retailers, which might set up eBay-run online stores.
GSI’s technology, services and warehouses were employed by the likes of Toys “R” Us and shoemaker Kenneth Cole for website management, online marketing, payment processing and customer service. The obvious competitive target: Amazon.
But the online marketplace eventually decided it wanted to focus on its core business. In July, around the time it sold PayPay, eBay sold off eBay Enterprise to a consortium of private equity firms.
Last November, Zeta Interactive — co-founded by ex-Apple CEO John Sculley – said it bought eBay Enterprise’s customer relationship marketing division, which included an email service provider. Zeta manages brands’ customer data and other kinds of marketing.
The eBay Enterprise’s legal launch date was the first week of this past November. While the company is legally spun off, Jones noted that some of the systems are still “deeply integrated” with the parent eBay, so it will take some time for those to be disconnected.
In December, advertising and conversion platform Ve Interactive announced it had purchased eBay Enterprise’s display retargeting business.
Jones started affiliate network Pepperjam in the early 2000s, which was sold to GSI in 2009 and then came along to eBay Enterprise two years later. Jones, who has been CEO of eBay Enterprise for only a few weeks, had been running the company’s affiliate networks and digital marketing.
Performance Marketing
Jones agreed that the current name — eBay Enterprise Marketing Solutions — doesn’t quite roll off the tongue. He assured me that a new and apparently more agile name is in the works.
But, while the name is still in flux, the new company’s vision is not. It’s centered on performance marketing.
The centerpiece is affiliate marketing, which Jones sees as having received a turbo boost by his company’s just-announced purchase of AffiliateTraction. He pointed out that AffiliateTraction was “the largest affiliate management agency,” and he’s especially pumped about that acquisition’s technology platform. For instance, it recommends which affiliated sites/blogs a brand should have in its network.
Jones ranks his company as third behind Commission Junction (now CJ Affiliate) and LinkShare (now Rakuten) in affiliate networks. But the idea is not only to provide affiliate networks, but also the technological tools and the services to manage other affiliate networks.
“From a size perspective, we’re still number three,” he said, but “from a technology perspective, we’ve probably leapfrogged them.”
An important differentiator for the new eBay Enterprise, he said, is that it is “both a technology company and a service business.”
Affiliate networks are those links to retailers that are offered on blogs, publishers’ sites, and other online locations. For instance, Dick’s Sporting Goods — an eBay Enterprise customer — makes links available all over the web to the products it sells.
When someone clicks on a link in a blog post to, say, a baseball glove at Dick’s and makes the purchase, the blogger gets a fee. Managing all those links, relationships and payments in the affiliate network — either as the affiliate network, or the tech, or the services – is the core of what eBay Enterprise is doing.
“The Holy Grail” Of Marketing
Affiliate marketing cannot be completely automated, Jones noted, describing it as “the most manual of all digital channels.” There are relationships with thousands of bloggers and publishers to maintain, since brands want as many links and as much exposure as possible.
Complementing that affliliate network business at eBay Enterprise are other forms of performance marketing, where brands pay fees as a result of user actions. These include search marketing, with search engine optimization, paid social ads, and search ads.
“That’s the Holy Grail” of marketing, Jones said. “To pay for performance.”
Jones noted that the purchase of the Digital Net Agency was mostly an “acqui-hire” to bring on board that company’s personnel, who are focused on search engine marketing and advertising, as well as affiliate management.
He’s looking to possibly expand into cost-per-action display ads, where the advertiser pays only when a user takes an action, like filling out a form or making a purchase.
“The dream,” he said, “is to be the number one performance marketing company on the planet.”
“It’s an industry that’s gotten lazy.”
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