AuctionBytes conducted an email interview with Todd Lutwak, Senior Director of Seller Development of eBay, about the company's new feature launched this week. The Cross Merchandising feature has been controversial as it places ads for competitive ads directly inside sellers' listings.

UPDATE: eBay's public relations department provided answers to my questions for the email interview with Todd Lutwak. When sending the answers via email, one of eBay's PR staff members failed to indicate that eBay spokesperson John Pluhowski provided the answers to my questions instead of Mr. Lutwak, as had been originally arranged.

AuctionBytes: The cross-merchandising, announcement states: "Items are chosen based on popularity - the items in the same category most watched by buyers." Doesn't this goes counter to Best Match best practices by driving untargeted traffic to listings that can hurt the Manage your sales to impressions ratio?

John Pluhowski: Cross-merchandising is a great opportunity for sellers to boost exposure for their listings to the most interested buyers during the busy holiday season. When items appear in the merchandising placement of View Item Pages those are not counted as impressions, so it does not impact sellers' placement in Best Match. The cross-merchandising feature is also completely optional to sellers. If a seller opts out, other sellers' relevant items won't show up on his/her View Item pages, but his/her relevant items won't show on other sellers' View Item pages either.

Sellers should carefully examine the trade-offs. The cross-merchandising feature is a great way for sellers to get items in front of more eager holiday shoppers. For more information, please go here

AuctionBytes: But would driving untargeted traffic to listings hurt the sales-to-impressions ratio? For example: I looked at a listing today, "CELTIC CROSS BONE PENDANT NECKLACE IRISH IRELAND" and the "Check out the most watched" showed me dog tags. If I click on the dog tags listings, but I'm really looking for cross pendants, I'm not likely to buy dog tags. But the dog tag seller sees an increase in traffic, hurting his Sales to Impressions ratio.

John Pluhowski: When an item appears on the merchandising module of a view item page that doesn't count as an impression and therefore would not hurt your listing performance score (sales to impressions ratio).

In addition, the "most watched" items appearing on view item pages are targeted to the category for the current view item page where they appear on. We observed that buyers who clicked on the "most watched" merchandising on the view item page contributed to a significant lift in purchases (given their interest in the item prior to click).

AuctionBytes: On the other hand, if you showed closely matching items in the cross-merchandising box, is that fair to the seller who paid for that View Item page, yet someone else's listings appear?

John Pluhowski: Our testing confirms that most sellers will benefit from the increased exposure site-wide. For those sellers that participate in the program, they could gain more exposure for their listings by having them appear across other sellers' view item pages. In any case, sellers can choose what works best for them.

AuctionBytes: Why not show sellers other items instead of competitors' items?

John Pluhowski: The "most watched" approach yielded a significant lift in sold items compared to other approaches that were tested. eBay Stores sellers currently have the ability to cross-promote sellers other items, so that will continue to be an option for these sellers.

AuctionBytes: "Most watched" is a way for shoppers to keep an eye on a particular listing, but I associate that with auctions. Is that correct? (Why would someone "watch" a fixed price listing?)

John Pluhowski: eBay buyers watch items across all formats - auction and fixed price. Buyers may watch items to access the item easily for comparison shopping; to monitor the auction price; or save the item in My eBay if the buyer is not ready to make the purchase in that session, etc.

AuctionBytes: Why use "most watched" as a way to determine what items should be displayed in the listings? And can't that be gamed by sellers?

John Pluhowski: This merchandising approach has been used throughout the site (e.g. homepage, checkout confirm) and email and has performed very well. We haven't observed any gaming of the "most watched" feature to date.

AuctionBytes: The Brews News blog showed why "most watched" might not be the best approach - looking at new fixed-price listings from U.S. sellers brought back used, auctions from overseas sellers, for example, and in one case, brought back a mis-categorized item. In another case, a low-rated seller. What is your response to charges that most watched is not bringing back relevant or quality listings?

John Pluhowski: We tested various merchandising approaches on the View Item page, and the "most watched" items drove a significant lift in purchases compared to other approaches that were tested. Our test data has showed that this is a high performing approach.

AuctionBytes: If eBay is so confident this is a good program for sellers, why not make it an opt-in program rather than opt-out?

John Pluhowski: Based on the performance uplift we observed across the board, we believe this is a valuable feature for most sellers, which guided an opt-out approach. Sellers can opt-out at any time if they don't think this benefits them. We recommend that sellers carefully consider the trade-offs before opting out - it could be an opportunity to gain more exposure for sellers' listings.

AuctionBytes: Do you think eBay loses credibility given its promise to sellers that it would give 60-days notice before making significant changes to the site?

John Pluhowski: We first announced this during the first seller release of 2009 together with the rollout of the new item page and we communicated the change extensively to sellers through multiple channels. In any case, sellers can opt-out from this change at any time - we have provided flexibility for those sellers who do not want to use this feature.

AuctionBytes: Is it fair to give less than 24 hours notice to sellers who are running active listings that they can't cancel?

John Pluhowski: Sellers can immediately opt-out of the feature - this preference is then immediately reflected on sellers' view item pages. Sellers do not have to cancel a listing - we'd instead urge sellers to opt-out if that is their preference.

We don't often make changes this close to the holiday season. However, the test results showed a considerable increase in sold items, and we wanted sellers to start benefiting from this as soon as possible.

AuctionBytes: Why not give sellers an affiliate reward if their listing drove a shopper to another listing where the sale was made?

John Pluhowski: At this time, there is no plan to do this.

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Comment in our Blog:

AuctionBytes Blog: "eBay Displays Competitors' Ads on Live Listings" (link)

AuctionBytes Blog: "More Than A Few Kinks in eBay's Cross-Merchandising" (link)

Related Link:

eBay's announcement of Cross Merchandising feature (link)