eBay to Stop Advertising Inside Mobile Apps: “It’s Not Worth It.”

ebay Devin WenigEBay is ecstatic about mobile, just not about mobile advertising.

Devin Wenig, eBay’s president of global marketplaces, said in an interview that next year the company will stop running mobile ads inside of its applications.

“We aren’t happy with the user experience and we don’t need the money,” he said.

This year, eBay displayed ads inside of its iPhone app as an experiment, but found that they were distracting and cluttered up the smaller screens. The ads also didn’t deliver meaningful revenue.

“It’s not worth it,” Wenig added.

Fortunately for eBay, it has options.

The primary way it makes money is through selling products online. Meanwhile, other media properties that are mostly supported by advertising are left dealing with the fact that ads on mobile don’t perform as well as they do online.

“Some don’t have an alternative business model. In this case, it’s better to be lucky,” said Wenig, who, as the former CEO of Thomson Reuters Markets, knows all too well what it’s like to be in the other camp.

Despite eBay’s lack of enthusiasm for mobile advertising, it is a huge promoter of mobile commerce in general, as it serves consumers wherever they want to shop.

The San Jose-based company announced back in September that its mobile apps had been downloaded 100 million times since launching four years ago. That’s not a trivial number, given that it’s equal to the number of active users on eBay last year. Additionally, this year, eBay expects to transact more than $10 billion in mobile volume from its apps. In fact, the company just hit its biggest mobile shopping day ever on Dec. 2.

For advertisers, this should be a reminder that there is still a lot of work left to be done to make advertising run smoothly across a range of mobile devices. EBay’s huge mobile audience should be attractive to marketers over the long term, but given that it was only conducting experiments for now, its decision to hold off on in-app advertising won’t be counted as a huge loss.

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— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik