Back to Relevancy… It really is important.
Wednesday, June 28th, 2006This discussion goes back to my earlier post about relevancy and store listings.
One discussion that has intrigued me recently is what eBay could do instead of MORE trust and safety regulations to increase the health of the marketplace. At this point, Trust and Safety seems to often have the first and last word on tons of policies at eBay. From a business perspective, you could call that a moat, or you could call that a liability if another service could come along and eliminate the need for it due to clever technology.
As Scot likes to piont out, Overture was pretty sure it had a huge moat in that it was supposed to be way difficult to build a paid search platform, and Overture had the benefit of network effects in terms of its distribution. And eBay sellers themselves sometimes convince themselves they have a huge moat in their business.
The truth is, in the face of disruptive innovation or true competitive differentiators, a moat that once kept competitors out can quickly keep you “in”. Overture viewed the fact that it didn’t have to maintain a public-facing site as an asset — all of this was run by partners. When Google came along, they proved otherwise QUICKLY.
What if eBay were to implement its Trust and Safety policies in the form of relevancy in the search? As an example. As a seller, I list 1 million products just to flood my category. No one buys them. Why couldn’t eBay track this and add this to the seller’s relevancy score? The next time the seller lists, if they want to show up in the place they showed up previously, they have to pay higher listing fees (a disincentive), or they show up lower in results.
This way, the system tends to self-correct for this type of things.
Let’s take another space that eBay is currently wading into currently: shipping rates. Unless you have a bright-line policy like Amazon and Half.com does (where they say explicitly what they will credit sellers on shipping), you are treading in a morass of policy upon policy, until soon you are forced to introduce a policy hub to explain it all. And of course, does that really explain it? Well someone has to maintain that policy hub, and the wording behind it. And then you need teams of lawyers to enforce those policies which translates into even higher overhead.
Does relevancy provide a solution here? Perhaps… Perhaps. Personally I think click-through (Google’s current method) is a poor measure of relevancy. It rewards misleading titles and keywords — another huge policy concern for eBay as well BTW. I can’t tell you how many sellers I’ve known taken down for keyword violations in titles on nuances buried in policy portals.
A better solution is to base relevancy and search result position on conversion. A buyer clicks on a listing. Sees $50 shipping - are they likely to buy from that seller? Maybe, maybe not. If eBay keeps optimizing its listing pages like eBay Express does (as opposed to traditional eBay), then it certainly becomes far less likely for the buyer to miss the fact that shipping is $100 on a $5 item.
So what does the buyer do? Click back. For a reasonably priced seller, it is more likely to convert. Boom. This feeds into the seller’s relevancy score, and they are rewarded with more business and a lower listing fee for that behavior. The untrustworthy seller’s listing fees go up due to their overall poor relevancy (likeliness to convert).
And that, ladies and gentlemen, is a virtuous feedback loop.
