eBay to introduce ads in its mobile app

eBay Inc., one of the largest online marketplaces in the world, is planning to launch an advertising network for its mobile app in the last quarter of 2014. These will be targeted ads which will be placed using data tracked from shoppers, allowing marketers to reach eBay's roughly 4.6 million daily visitors.

According to the company, it tracks over 290 million hours of shopping on a monthly basis, and its users spend 150 minutes on its app per month as compared to 47 minutes for its nearest competitor. The ads will be sold based on a consumer's activity on the site.

"For the first time, we are giving marketers the opportunity to connect with eBay users throughout their entire shopping journey," read a post on the company's website.

"These ads, expected to launch toward the end of this year, won't be banner ads. Instead they will show up within a user's product feed," it further read.

While this will be a new source of revenue for eBay, it has the risk of scaring away potential buyers who would not want to be bugged by marketers. The main source of revenues for eBay as of now includes transactions on its marketplace and its payment service PayPal.

The in-app ads will roll out globally exclusively on the eBay app, and will not be available on PayPal or any other apps by the company. As of now, 40 per cent of eBay's sales involve mobile, and it contributed $20 billion in GMV in 2013.

The company had earlier done mobile app testing in 2012, however, at that time the ads did not generate a lot of revenues. Amazon Inc., one of the biggest competitors of eBay already runs an ad network. It is expected to make less than $100 million from mobile ads this year, according to industry research firm eMarketer.