EBAY 2004 TELEVISION CAMPAIGN

OVERVIEW
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, ebay.com, 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.

HISTORICAL CONTEXT
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 www.ebay.com. 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 ebay.com. 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.

TARGET MARKET
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.

COMPETITION
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 google.com 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.

MARKETING STRATEGY
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 ebay.com. 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 eBay.com.
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.

OUTCOME
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.

ABBREVIATED CAMPAIGN

OVERVIEW

In 1995 eBay Inc. was founded in San Jose, California. It was an online site, located at www.ebay.com, that enabled users to buy and sell items from other users. Rather than sell items itself, eBay made money by charging fees on completed transactions and by charging for advertisements on its website. In 2003 more than 900 million items were posted for sale on eBay. These items included automobiles. Because of their relatively high prices, automobile sales generated larger fees than many other kinds of sales. In the arena of used-car sales, however, the company faced competition from online search engines such as Google and Yahoo! as well as from traditional newspaper advertisements. EBay charged the ad agency Goodby, Silverstein & Partners, based in nearby San Francisco, with developing a radio spot that would inform consumers of the benefits of using eBay to sell automobiles. The result was a humorous 60-second spot called ‘‘Abbreviated.’’ The spot featured a narrator using an ‘‘abbreviated’’ language culled from newspaper classified ads. Rather than just telling listeners that classified ads did not provide enough space to adequately describe an automobile, the narrator demonstrated this through his own speech. Then he touted the benefits of selling cars on eBay. The spot was a hit with critics. In 2005 it won a Silver Lion at the International Advertising Festival, a 2005 Bronze Clio Award, and the top prize at the annual Radio Mercury Awards. These awards, however, came after eBay’s decision in March 2005 to part ways with Goodby, Silverstein & Partners. The company elected to work with BBDO on future campaigns. EBay felt that the larger New York–based agency was better equipped to handle integrated campaigns that combined online, televised, and radio elements. Both agencies were part of the larger communications company the Omnicom Group.

HISTORICAL CONTEXT

The San Jose–based eBay was created to capitalize on the increasing expansion of the Internet into everyday life in the United States and around the world. The company provided sellers and consumers a platform where they could find each other and conduct transactions. Sellers offered a wide range of goods via the eBay website, www.ebay.com, including sneakers, automobiles, furniture, clothing, and collectibles. The site was best known for the online auctions that it enabled. Sellers posted an item on www.ebay.com, and buyers could view the item and bid on it. The highest bidder purchased the item.

As the Internet became more popular, eBay was able to expand quickly, and the company set up companion sites around the world. Soon eBay began describing itself as ‘‘The World’s Online Marketplace.’’ The company’s profits came via fees it collected on each transaction as well as from advertising it sold on its assorted websites. The approach was largely successful, and in 2003 alone more than 900 million items were listed on eBay. By 2004 eBay was offering the PayPal service, which enabled buyers to pay sellers through their credit cards or via secure account transfers. There were several subsections to the eBay site, including one for automobile sales, labeled ‘‘eBay Motors.’’ Consumers could search cars by make and model or by price. Because higher-priced items generated higher fees, the company made more money from automobile sales than it did from many other items sold via www.ebay.com.

At the outset eBay relied on word of mouth to promote its business. As the company became more successful, it branched out into print and radio advertising. In 2002 eBay conducted its first television campaign, ‘‘Do It eBay,’’ which was developed by Goodby, Silverstein & Partners. The San Francisco–based agency had been responsible for all of the company’s radio advertising through 2004 as well. Goodby, Silverstein & Partners was best known for its award-winning ‘‘Got Milk’’ campaign on behalf of the California Milk Processor Board. The agency was founded in 1983 by Jeff Goodby and Rich Silverstein, who had previously worked together at the Ogilvy & Mather agency.

TARGET MARKET

EBay usually aimed for a very large target market. The company wanted to be the destination of choice for anyone shopping online. The website had always been especially popular with collectors, who used the site to track down rare and hard-to-find items, such as out-ofprint records or idiosyncratic household goods. The site listed many types of items for sale, however, and it was also a major attraction for bargain shoppers and consumers who were comfortable doing their shopping online. The company also allowed people to sell automobiles on the site. These were expensive items, which meant that the company collected higher fees on such transactions. The kind of shopper that bought an automobile on eBay was a typical used-car shopper: younger and on a budget. The company saw automobile sales as a prime candidate for growth.

COMPETITION

The most serious competitor for eBay, especially for bigticket items such as automobiles, was the search engine Google. Like eBay, Google did not sell anything itself. Instead, consumers used Google’s website to search for items online. For example, a used-car dealer or an individual would post on a website the vehicles they had for sale, and buyers would find the site via Google. Other search engines, such as Yahoo!, offered similar services. In fact, Yahoo! even allowed sellers to post ads that would appear in the Yahoo! Autos section of the search engine’s website, www.yahoo.com. Although neither of these companies provided online auction services, they competed with eBay by providing an alternative way for consumers to buy automobiles online. The company was even more concerned, however, about its off-line competitors. While certain products, such as music files, collectibles, or books, seemed to attract online buyers easily, most consumers were accustomed to buying automobiles through off-line means, such as classified advertisements in newspapers. To grow its automobileselling business eBay needed to lure more of these people into buying (and selling) automobiles on ebay.com.

MARKETING STRATEGY

Goodby, Silverstein & Partners was the agency of record on the 2004 radio campaign, which consisted of a 60-second spot titled ‘‘Abbreviated.’’ It was part of the $250 million in U.S. advertising that eBay purchased in 2004. Later that year eBay augmented its radio efforts with a television campaign, also engineered by Goodby, Silverstein & Partners. This campaign, which carried the tagline ‘‘The Power of All of Us,’’ ran in the fall and winter shopping season. It did not focus on automobiles. The ‘‘Abbreviated’’ radio spot was fairly straightforward. It featured a man speaking directly to the audience, without any music or sound effects. In the ad the speaker communicated in short, abbreviated words, like those used in a typical classified ad in a local newspaper. He explained to consumers—especially potential sellers—that the abbreviated language used in newspaper classifieds was too unclear to give potential buyers an idea of what the car was actually like. In contrast, eBay allowed sellers a chance to post more detailed text and pictures, so buyers knew just what they were getting. ‘‘Abbreviated’’ was distinctive both for its message and for its quirky vocabulary, which entailed shortening words by leaving out most of the vowels and many of the consonants. By referring to a car as ‘‘cr,’’ for example, the spot captured the listener’s attention. It began with the announcer saying, ‘‘If YR FMLR with the CLSIFDS section of the NWSPPR, you PRBLY understand this MSSG quite well.’’ This strange-sounding language was scattered throughout the spot, driving home its central thesis—that classified ads offered too little space for sellers to describe a vehicle properly—by demonstrating it. At one point the speaker described a car using the abbreviated language of newspaper ads, and the results sounded like gibberish.

The commercial also touted eBay’s Vehicle Protection Program, which guarded consumers against being stuck paying for a car that was not in as good a condition as the advertisement had claimed. Finally it reminded listeners that eBay offered a nationwide customer base, as opposed to the local reach of most newspapers. Even when describing eBay’s own services, the narrator still slipped into abbreviated words occasionally, using them sporadically enough that his meaning was not lost but often enough to keep the spot’s humor going. ‘‘Abbreviated’’ referred specifically to ‘‘eBay Motors’’ instead of just ‘‘eBay’’—even though ‘‘eBay Motors’’ was only a category on www.ebay.com, as opposed to an actual separate entity. This distinction was made for consumers who were used to thinking about eBay as a place to buy smaller items, such as household goods or clothing. It also reinforced the idea that eBay was not only a place where automobiles were available for sale but also a natural place to go shopping for these kinds of items. This subtle gesture allowed the spot to concentrate on the benefits of selling cars on eBay without having to clear any hurdle the listener might have about shopping for an automobile that way. The commercial was recorded at the GSP Post studio in San Francisco. It was produced for Goodby, Silverstein & Partners by Brian Coate and was written by Tyler McKellar. GSP Post served as the production company.

OUTCOME

The spot was a success, although it also marked the end of eBay’s account with Goodby, Silverstein & Partners. In March 2005 eBay ended its relationship with the agency, replacing it with the New York–based BBDO. The company believed that BBDO, a larger agency, was better equipped to provide integrated marketing campaigns that would combine Internet, television, print, and radio elements.

Regardless, ‘‘Abbreviated’’ was particularly successful with critics. It received a Silver Lion in the Radio category at the 2005 International Advertising Festival in Cannes, France. Called the ‘‘Olympics of Advertising,’’ the Cannes festival was among the most prestigious in the world, with campaigns and agencies from all over the globe under consideration. ‘‘Abbreviated’’ also won a Bronze Clio that year; the Clios were one of the largest international advertising award programs. In addition Goodby, Silverstein & Partners won the $100,000 first prize at the 2005 Radio Mercury Awards for the ‘‘Abbreviated’’ spot. Based in New York, the Radio Mercury Awards were begun in 1992 to offer an exclusive recognition for excellence in radio advertising. All of these awards were announced after eBay had terminated its relationship with Goodby, Silverstein & Partners. The effort contributed to a solid year for eBay. The company finished 2004 with consolidated net revenues of $3.27 billion, a 51 percent improvement from 2003. The company also reported a record 1.4 billion listings during 2004, up more than 45 percent from the previous year. More than $34 billion of transactions took place in 2004 via eBay’s online auctions and listings. Therefore, the ‘‘Abbreviated’’ commercial appeared to succeed in helping traffic at www.ebay.com continue to grow.