When internet brands become successful, it is inevitable that they experience a few growing pains.
Social networking sites are a recent case in point. Facebook annoyed users by publicising their purchase decisions to their friends, while MySpace, since its acquisition by Rupert Murdoch's News Corp, has come under fire for the number of ads displayed on its pages.
Now eBay, once seen as a democratising force that cut out the corporate world by allowing consumers to buy and sell directly to each other, is having to deal with a backlash that last week culminated in a global boycott.
Its users argue that changes to the site, introduced by new president and chief executive John Donahoe, are turning their beloved online flea market into a corporate monster.
Earlier this year eBay angered users by removing the tool that allows sellers to provide negative feedback about buyers. Users say the removal of the tool will make it difficult to alert others to fraudulent or malicious purchasers.
Changes to its fee structure, which in some cases will see the commission taken by eBay increase, have also upset the faithful. eBay has insisted that the changes are fair, but offered a sweetener of 5p listings to UK users, coincidentally, on the day of the boycott.
How eBay will be affected in the long term remains to be seen, but the boycott has certainly succeeded in attracting the wrong sort of publicity for the brand.
At the end of last month Deutsche Bank made matters worse by revealing that new sales listings on the company's UK website were 9% lower in the third week in April, compared with the preceding seven days. Against the same week a year ago, new auction listings were down by 19%.
With 241m users worldwide, eBay remains the biggest online auction site, but preventing those users from straying to the growing number of rival sites will present a challenge.
So what can eBay do to keep its users happy and attract new ones? We asked Nigel Walley, managing director of digital media research and development consultancy Decipher and a former marketing director of NTL's internet division, and Tom Hyde, business development director of Profero, whose clients include Ask and Yahoo!
Diagnosis 1
Nigel Walley managing director, Decipher
eBay has made one of those awkward transitions from being a disruptive brand, where it transformed the listings sector, to a point where it feels like an establishment brand struggling with a lack of direction. A component of this is an apparent lack of innovation.
In a sector where consumers are drawn to the new and unusual, eBay has established itself and then barely evolved. Its problem is that you either use it or you don't, and if you don't, there is very little eBay can do to convince you to start now.
For a relatively new company, eBay has phenomenal name and logo recognition. The icons, in primary colours, have a distinct, stand-out quality. However, this imagery does not translate into a set of brand values or philosophy recognisable to non-users. eBay was a brand built for, and by, its users. It did almost no traditional marketing during its initial growth years, and it is difficult to experience the brand unless you use it.
Its challenge must be to scratch away this veneer and expose something compelling for the wider market.
Remedy
- Accept the global corporation positioning and stop trying to market like a start-up.
- Take a lead from brands such as Coca-Cola. Build some lifestyle pillars into the marketing strategy that can allow marketers to build some deeper, more complex, stories around the brand.
- Consumers need to see new service features. Give the marketing team a subject matter they can work with, and provide a reason for non-users to try it.
Diagnosis 2
Tom Hyde business development director, Profero
eBay is a classic example of what makes a successful internet brand, well, a success.
It was created by the people, for the people; it was anti-brand, anti-establishment and not ashamed to be ugly. Its appeal was fundamentally rooted in an avant-garde approach to brand, product, service and functionality.
It didn't need to be slick, it just needed to work well and let its fans feel in control. Like all breakthrough movements, you were either part of it, or a dinosaur.
eBay's brand is inextricably connected to its product. The way it works and the people who use it define it more than traditional marketing ever could. Herein lies the 'problem': it has changed. Popularity bred commercial success, which bred mainstream appeal, which in turn created shareholders, commercial pressures and rigorous business practices - all of which led to contempt from eBay's original fans.
So, eBay is now mainstream. This is not a problem, because mainstream is big, and big tends to be good for business. It just needs to embrace its new status.
Remedy
- Borrow from the old. The best retail experiences leave you feeling warm and cosy, and properly looked after. This should be reflected in the advertising.
- Add to the functional brilliance and feel more sumptuous - something that ecommerce sites often overlook.
- Go beyond the web and look for partnerships that will take the brand in an interesting direction.
- Accept the success.