In my last blog entry, I discussed the fact that eBay was infiltrated by hackers in early 2014. I related that event to our experience as a company in 2014 - as top sellers in the eBay Marketplace, we were experiencing a consistent downward trend in sales for the first time ever.
Our ongoing research led us to a second discovery regarding big changes in the eBay world. This turn of events required us to gain understanding in an area that we previously knew very little about: SEO, or search engine optimization. I tend to avoid topics that involve any combination of computer science and mathematical algorithms. Any knowledge that I have on this topic is non-technical and just barely scrapes the surface of understanding. Basically, Google has developed a formula and built it into their search engine. That formula determines which web pages are given priority in any search results. Google manipulates their formula to affect the results of any search based on a pre-determined set of criteria. Every change to the formula creates winners and losers - some pages will appear higher in search results, while others will appear lower. How does this relate to our eBay sales?
During the week of May 19, 2014, some big changes occurred in Google’s formula. eBay had mastered several techniques related to SEO, which allowed them to optimize search results for items listed on their website. In other words, they were moving all of the items listed on eBay to the top of everyone’s Google search results. One technique they used involved something referred to as “doorway pages”. These were low, thin content pages created to increase eBay’s search footprint and bring users into the eBay system. Google let it slide for some time, but eventually felt as though eBay had gone too far.
It has been reported that Google changes their search algorithm somewhere around 500-600 times every year. While most of these changes are minor, they occasionally roll out major formula updates, causing significant changes in search results. One such update was Panda 4.0, released on May 19th, 2014. As stated by Jason Del Rey, in an article written for Re/Cod (read it here), Panda 4.0 was designed to “improve the quality of search results by increasing ranking for sites with quality content while penalizing sites with thin, low-quality content or duplicate pages meant to boost results.” Those who monitor such things notices that eBay took a big hit soon after Panda 4.0 was released. Del Rey went on to say, “As it turns out, Google did in fact penalize eBay and knock a whole bunch of its pages off Google’s search results, but it wasn’t part of Panda, according to a person familiar with the situation. Rather, it was part of a so-called ‘manual action’ that Google took against eBay early this week…”. This information is substantiated in an article posted on RefuGeeks (read it here).
A day later, the rollout blogger Matt Cutts stated that it was too early to tell how any actions taken may impact eBay, but said,“We’re hearing reports of big losses and gains, which is the norm for any major update - for every winner, there’s a loser”. He then provided the following statistics:
Over the course of about three days, eBay fell from #6 in our Big 10 to #25. Change is the norm for Google's SERPs, but this particular change is clearly out of place, historically speaking. eBay has been #6 in our Big 10 since March 1st, and prior to that primarily competed with Twitter.com for either the #6 or #7 place. The drop to #25 is very large. Overall, eBay has gone from right at 1% of the URLs in our data set down to 0.28%, dropping more than two-thirds of the ranking real-estate they previously held. (read more here)
When we reached out to eBay president John Donohoe in regards to this information, I received a reply from his office. The replay stated, “As I am unable to give direct insight on the changes Google has or will make to their search engine, I can only reassure you that we’re constantly working with all search engines to make sure we’re providing our sellers with optimal search results.”
We persisted in our research and found a report by Searchengineland.com providing the following information about the algorithm change: “The loss of traffic resulting from that has been noticeable enough that eBay acknowledged it in a financial call this week, suggesting it may have cost up to $200 million in revenue." The article quotes eBay’s chief financial officer, Bob Swan, as saying, “The combination of the cyber-attack and the Google SEO had an immediate and dramatic impact on GMV (Gross Merchandise Volume) Growth”. The article states, “Swan said that it will take some time to solve the penalty issue, which will be an ongoing drag to its auctions business”. Swan said there “was quick, swift and immediate impact….we were not letting people in the door until they reset their password and/or we weren’t getting the new buyer traffic from SEO." (This article can be found here.)
It doesn’t appear that the issues caused by these events will be going away anytime soon. According to a January 23, 2015 blog post by Ina Steiner at ecommercebytes.com, “eBay also warned on Wednesday that things would get worse for the marketplace before they got better. The company’s CEO John Donahoe said he expected Marketplaces’ performance to soften further before seeing stabilization and improvement.” (read it here)
With the discovery of the information concerning the security breach, and now the Google algorithm change, answers were finally coming to the surface. These two events alone were enough to take the wind out of our sales. But that was just the beginning of a bumpy year for eBay.
See the rest of our eBay series here:
Part I - Why are My eBay Sales Down?
Part II - eBay Takes a Hit
Part III - Google Takes Aim
Part IV - eBay Alternatives?
Part V - Fixing the Defects in eBay's Defect System
Part VI - Breaking Up is Hard to Do: eBay's Split from PayPal
Part VII - Is eBay's Cassini Really the "Best Match"?
Part VIII - Is eBay's Cassini Stuck in Orbit?
The Plan, Part I - Positioning for More than Survival
The Plan, Part II - Expanding Our Reach Beyond eBay
Frankly, I am not fond of monkeys. They affect me the way spiders and snakes affect other people. The flying monkeys in “The Wizard of Oz” and the rogue monkeys in Robin Williams’s “Jumanji” were menacing to me, and I closed my eyes so I wouldn’t have to see them.