Marketing Campaign Case Studies

Wednesday, September 17, 2008


The San Jose, California, company eBay, Inc., was an online-based auction and selling community that in 2004 serviced 115 million shoppers, who purchased items ranging from clocks to shoes to automobiles. The company did not sell anything itself, instead making money from advertising and by charging sellers listing fees for using the company’s website,, to sell items. In 2004 eBay restructured its listing fees, charging higher fees for more expensive items, in an effort to encourage sellers to offer lower opening prices for auctions. This carried the risk that some sellers would be less inclined to use eBay, because they might want to avoid the fees. Although eBay was the most popular online-auction site, it faced pressure from other Internet companies, such as Amazon and Google, whose own services diverted consumers away from eBay.
In order to maintain strong visibility in the face of this pressure, eBay earmarked $250 million for marketing in 2004. From its inception eBay had only run one major television campaign, relying on word of mouth, Internet ads, and print campaigns to attract consumers. In 2004, however, the company commissioned Goodby, Silverstein & Partners, an agency based in San Francisco, to run a new television campaign. There were four spots in all, rolled out that October and November. The most popular spot was known as ‘‘Toy Boat.’’ It featured a boy losing his toy boat at sea, only to find it again as an adult after a fisherman found it and posted it for sale on eBay. The commercial featured a voice-over by Hollywood actress Rosanna Arquette. Other spots appealed to the sense of community offered by eBay. The campaign was meant to differentiate eBay from impersonal sellers such as Amazon or search engines like Yahoo and Google. The spots were a hit with critics. The Directors Guild of America singled out Noam Murro, director of ‘‘Toy Boat,’’ for Outstanding Directorial Achievement in Commercials. The commercials helped eBay’s fourthquarter revenues jump 24 percent compared to the same period in 2003. The campaign also marked the end of eBay’s relationship with Goodby, Silverstein & Partners. In 2005 eBay offered its business to BBDO, a larger advertising agency based in New York City.

The Internet-centered company eBay, Inc., was founded in September 1995 and was based in San Jose, California, near the state’s famous ‘‘Silicon Valley,’’ so called because it was home to a number of technology-related businesses. By 2004 eBay employed about 9,000 people and operated around the world. It was intended to provide a global trading platform where consumers could trade or auction different items. EBay allowed vendors and consumers to buy and sell a wide range of items, ranging from clothing to electronics to celebrity collectables to cars. To describe its business it adopted the slogan ‘‘The World’s Online Marketplace.’’ Throughout the 1990s the company expanded, adding local eBay sites to service countries that included Australia, China, India, and France.
EBay offered buyers the choice between either bidding in an online auction or buying an item outright for a predetermined price. All sales took place via the company’s website, which in the United States was located at The company made a profit not by selling items itself but by taking a percentage of the sales price of the items sold on the site. EBay collected listing, feature, and final-value fees from all of the registered sellers that used the site. Advertising on the site itself provided another source of income. The company also expanded its business by offering PayPal, an online payment system that could be used on other websites. In 2004 eBay purchased a 25 percent stake in the online community Craigslist, which offered online ‘‘classified ads’’ for people to buy and sell items. It had thus been emerging as a potential competitor for eBay. In eBay’s early years the company primarily relied on word of mouth to attract buyers and sellers to Even in the early 2000s the company stuck to more conservative print campaigns. The company’s first major television campaign was released in 2002; it was created by Goodby, Silverstein & Partners, a San Francisco–based agency that was especially known for its work with technology companies. The campaign later won a 2004 Gold EFFIE Award in the retail category. The spots helped eBay’s online community expand to 115 million shoppers.

EBay’s target market was anyone interested in buying or selling things online. Because younger people were often more comfortable with technology such as the Internet, consumers under 40 were especially important to eBay. Collectors, who used the site to track down hard-to-find items such as out-of-print books and CDs, were also considered to be valuable users of the site. After eBay raised its listing fees in January 2004, there was concern that some sellers might be more inclined to avoid listing on the site. The company had raised prices by about 9 percent across the board, but increases were as high as 45 percent on more expensive items. EBay hoped that this would convince some sellers to use a lower starting price for auctioned items, which would attract more bargain-conscious consumers, who then might be tempted to bid on more and more items. To prevent competitors from cutting into its core business, eBay decided that it needed to run another television-based marketing campaign. The company wanted to make sure that consumers still thought of eBay as the best place to buy things online.

By 2004 eBay was the dominant online-auction site in the world. Because of the nature of the Internet, however, the company did not only compete with other auctionoriented sites. EBay made its money through the sales conducted on its site and via advertising on that same site. Both required the company to keep attracting a large numbers of visitors to the site. While eBay did not sell anything directly, it needed brisk sales to generate fees. Therefore, one of its biggest competitors was the online retailer Amazon. Amazon sold a variety of products, ranging from books to electronics. It conducted highprofile radio and television campaigns. Its direct sales often competed with the sellers that used eBay, so the auction site had to be sure to keep its own profile on par with Amazon.
Perhaps the most dynamic force on the Internet in 2004 was the search engine Google. Google and other search engines, including Yahoo, did not sell anything directly, but users could find individual sellers via such search engines. Users went to Google’s website and searched for a particular product or seller; then they could connect with these sellers directly. Google did not have any connection with such sellers, instead making money from advertising sold on the website itself. Google even added a special search called ‘‘Froogle,’’ with which users could filter a search to show only online sellers. This cut into eBay’s business, because if buyers could find sellers directly through Google, they would have no reason to shop at eBay. It also meant that sellers could sell items on their own websites and avoid paying eBay any fees.

In 2004 eBay earmarked about $250 million for U.S. advertising. Once again, Goodby, Silverstein & Partners ran the campaign. The San Francisco–based agency had made its reputation designing innovative campaigns for online-based businesses such as E*Trade. It had handled eBay’s only other television campaign in 2002. The new campaign centered on four television spots, two that launched in October and two more that followed a month later. The spots were intended to promote the idea of eBay as a community, differentiating it from the impersonal retailer Amazon or the sprawling Web that the search engine Google harnessed for its users. By underscoring the communal aspect of eBay, the company hoped to lure consumers into spending more time—and therefore making more purchases—at The campaign used the slogan ‘‘The Power of All of Us.’’ One spot featured shots of people doing good deeds for each other, including opening doors for people and delivering food to shut-ins. On-screen text explained to the audience that eBay’s online community ‘‘proved’’ that people were ‘‘good.’’ The spot was an appeal to the sense of community that had inspired some eBay users to set up collectors’ clubs built around particular products sold on
The most popular spot, ‘‘Toy Boat,’’ was designed to underscore the perceived benefits of online auctions in general and eBay in particular. It began with a shot of a young boy playing with his new toy boat. The boat then was swept out to sea by the receding tide and apparently lost forever. Years later, however, it turned up in a fishnet. The fisherman who found it decided to make some money selling the toy on eBay. The now-adult boy discovered it there, posted in an online auction. The spot closed with the tagline ‘‘What if nothing was ever forgotten? What if nothing was ever lost?’’ Voice-over for the spot was provided by the actress Rosanna Arquette, known for her work in such films as Pulp Fiction and Desperately Seeking Susan.
Another commercial featured a man dusting off his clock collection. Soon his home was filled with other collectors offering him new clocks. He chose his favorite and added it to his current group of clocks. This spot appealed directly to collectors, people especially drawn to the site in hopes of finding a rare or unusual item. These kinds of items—a strange clock, for example—were not easy to find on sites like Amazon that focused on new, practical items, or via Google, which offered searches that showed popular (not quirky) products at the top of its listings.

Critics and audiences enjoyed the new spots. One, ‘‘Toy Boat,’’ garnered special recognition at the Directors Guild of America Awards for 2004. The spot’s director, Noam Murro of the production company Biscuit Filmworks, was honored for Outstanding Directorial Achievement in Commercials for ‘‘Toy Boat’’ and two other spots. EBay’s television commercials also helped boost the company’s sales in the last quarter of 2004, which coincided with the campaign’s run. U.S. revenues at the company were up 10 percent from the previous quarter and had increased a solid 24 percent compared to the previous year’s fourth quarter.
While the increase was below the 38 percent growth the company had seen in the same quarter between 2002 and 2003, it was still a healthy pace. EBay nevertheless discontinued its relationship with Goodby, Silverstein & Partners soon after the campaign finished, moving to New York City–based BBDO for future campaigns. The agency was larger and operated a more diverse portfolio than Goodby, Silverstein & Partners.

1 comment:

pat said...

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