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Must-know: Why PayPal is driving eBay's mobile growth

Part 2
Must-know: Why PayPal is driving eBay's mobile growth (Part 2 of 7)

Why eBay plans to start showing more ads on mobile

eBay showed very few ads on mobile for a frictionless user experience

In the previous part of the series, we discussed the transaction growth that eBay (EBAY) is experiencing on mobile, most notably through its PayPal platform. During the conference call to announce earnings, eBay’s management mentioned that until now the company had decided to show no or very few ads to users on mobile, which was important for a frictionless user experience on mobile. However, with the increasing eBay and PayPal platform usage from mobile, the company is looking to increase ad exposure on mobile. It said that it’ll start experimenting with this in the second half of 2014.

Ad mobile internet spending and growth ratesEnlarge Graph

The mobile Internet advertising market shows strong growth

Internet companies have realized that mobile is the future of the device market, with the PC market undergoing a structural decline. A few months back, an eMarketer’s report underlined the value of a presence in the mobile space. According to the report and as the chart above shows, global mobile ad spending increased from $8.76 billion in 2012 to $17.96 billion by 2013—an increase of 105%. This spending is projected to increase by another 75%, to $31.45 billion, by 2014, accounting for nearly one-fourth of total digital ad spending. This market could continue to show strong growth and reach around the $100 billion mark by 2018.

Google (GOOGL) and Facebook (FB) are the leaders in this market. Although Google has taken up a 50% share in this market, Facebook and Twitter (TWTR) have grown faster to gain share in this market. Even Pandora (P), a niche music player, has managed to place fourth in the race for mobile advertising market share. eBay is certainly looking to leverage the growth potential of the mobile ad market to show more ads to its mobile users.

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