5 min read

Sponsored Listings: The Definitive 2024 Guide

Chris Shuptrine
Chris Shuptrine
Updated on
March 2, 2019
Intro to Ad Serving

As a result of shrinking margins and increased competition, large retailers are seeking additional outlets for digital revenue. And as an alternative to programmatic ads, many are adopting sponsored listings, an eCommerce ad unit where vendors pay to have their organic listings promoted in search and browsing results, on the homepage, in emails, etc.

The problem with programmatic ads is they are obtrusive and page-slowing, which can hurt revenue if people abandon the site without purchasing anything.

This trade-off between revenue and user experience has propelled many e-retailers to avoid ads altogether (indeed, according to the tool used for the Ad Tech Insights tracker, fewer than 10% of eCommerce sites show ads).

However, this means most retailers aren't taking full advantage of their visitor traffic. Monetizing these visits drives incremental revenue that could pay for new hires to improve the core product, or enable companies to lower prices and stay competitive.

Sponsored listings are proving to be an innovative way to drive revenue without having a detrimental impact on sales or user experience.

amazon sponsored products

The pioneer in sponsored listings is Amazon, who drove billions from sponsored listings in 2019, and who in 2023, boasts Amazon Sponsored Product which continues to represent the largest share of advertising dollars at 78%. This revenue allows them to reinvest in lower prices and product enhancements, thereby further cementing their market leader position. Additional brands who have adopted sponsored listings with success include Yelp, eBay, and Edmunds.

sponsored car example

What are sponsored listings?

A sponsored listing is an organic listing that is promoted or highlighted in some way, often by being listed at the top of certain search results. Alternatively, a vendor could pay to promote their product in an e-mail, on the site's homepage, within an in-app notification, on a product page, or wherever an e-retailer puts organic product listings.

These "advertisers" would be brands/sellers who already work with the retailer and who are paying to get more visibility for their products/services.

They are also known as promoted listings, sponsored products, product listing ads, or some variant on those phrases.

For instance, let's say I'm an eBay seller who sells rings for $100. On an eBay search for "rings", my product is result #50, far down the page. So, I decide to use eBay's Promoted Listings product, and I pay $20/day to appear in the first row for the same search. This spend then results in two incremental sales a day (a win, since I'm paying $20 for $200 in new sales).

eBay promoted listing

In this scenario, everybody benefits:

  • The seller is cost-effectively driving more sales and gaining product visibility.
  • The eBay visitor is getting the same great eBay experience they've always had. Since eBay isn't resorting to programmatic ads, eBay doesn't have to worry about page-slowing JavaScript, obtrusive ad placements, and clicks that lead off-site.
  • eBay has increased the money it gets from me, the seller:
Before After
Weekly Ad Budget $0 $140
Weekly Sales 10 @ $100 = $1,000 24 @ $100 = $2,400
eBay's Weekly Sales Commission: $35 (3.5%) $35 (3.5%) $84 (3.5%)
Total $35/week $224/week, or __6.4x my previous value__

And this example is for just one seller and one phrase. Although eBay doesn't publish ad revenue figures, their traffic volume and engaged userbase could easily push promoted listings to a $100M+/year ad product.

(Also, technically the "loser" here would be the sellers who are already organically high-up, but who see a sales dip when they are pushed down by a paying seller. In this case, they may pay to promote themselves back up, increasing revenue for eBay further and enabling market forces to determine what the true value of that placement is. Either way, eBay is driving new revenue, further engaging its sellers, and providing a good user experience to visitors.)

Comparison to Google

You can compare sponsored listings to Google's pay-per-click search ads. While it may take months and hard effort to reach the first page for a given search, anyone can pay to appear as the #1 result.

google ads

PPC is a cash cow for Google (the ad unit was projected to drive over $45 billion in 2019 and the majority of Google's ad revenue still comes from search advertising), but they aren't the only brand who has made sponsored listings work. Yelp's sponsored listing product previously made up 70% of their total revenue. Applied to their 2017 earnings, that amounts to $600 million in sponsored listing revenue - which is almost entirely profit.

yelp ads

Who uses sponsored listings?

eCommerce Multi-Brand Retailers

  • Examples: Overstock, Walmart, Amazon
  • Description: Companies that sell other brands' products. Many, though not all, have brick-and-mortar stores too.
  • Who advertises: The vendors and brands whose goods the company sells. For instance, Playskool could work with Walmart to boost their product listings when somebody searches for, say, "best kid toys".

walmart ads

Online Marketplaces

  • Examples: eBay, Etsy, Chairish
  • Description: Sites that offer a marketplace for buyers and sellers to exchange goods. These brands do not have physical stores, and product listings are user-generated through a self-serve portal.
  • Who advertises: The seller pays to have their item artificially higher in search results and/or featured in some way.

ebay ads
chairish ads

Business Discovery Services

  • Examples: Yelp, ZocDoc, Hotels.com
  • Description: This bucket includes sites and apps that help people find businesses or business services. With Yelp, for example, restaurants can pay to have their listing appear at the top for anyone searching for nearby places. There's also Hotels.com, where hotels pay to have their listing highlighted; or a doctor-finder like ZocDoc, where doctors pay to be promoted for relevant searches.
  • Who advertises: The business/organization/doctor/etc pays for their listing to be highlighted, usually in location-based searches.

zocdoc ads

Any brand with listings

  • Examples: Ticketmaster, Medium, Yummly
  • Description: This is a catch-all bucket for any company with search or browsing functionality. For instance, Yummly (a recipe site) could have I Can't Believe It's Not Butter! sponsor a brownie recipe, in which their brand of butter is listed as an ingredient. When someone then searches for "brownies recipe", this listing could be artificially promoted to the first result. With a site like Ticketmaster, bands could promote their concerts when someone is looking for a nearby event. Even Medium could have a self-serve portal where writers pay to promote their articles on relevant search phrases.
  • Who advertises: It'll be the person or business that wants to highlight their content in search or browsing results.

yummly sponsored recipes

Are sponsored listings ads?

Given sponsored listings involve advertisers paying for content promotion, many would consider them ads. That said, sponsored listings share important differences from what we normally think of as ads.

Sponsored Listings Programmatic Ads
Click-Through Keeps users on the site and directs to an internal product page, helping to drive more sales and page impressions Link sends user away from the site
Appearance Blends in. Generally just an organic listing with a "sponsored" label Standard banner sizes that usually disrupt the page flow
Relevance Sponsored listing appears only if it's relevant to what the user is looking for (via search or browsing) Publisher has little control over relevance - it's up to the ad tech networks' algorithms
Page Speed When implemented server-side, load times can mirror that of organic content JavaScript tags and cookie matching scripts will burden a page and increase load times
GDPR Compliance Brands have full control over their users' data and do not have to worry about data leakage Bringing in RTB partners increases the odds of data leakage and accidental non-compliance
Brand Safety Publishers can ensure brand safety because the advertisers are vendors/sellers that have already been pre-approved to sell their products Publishers don't have full control over whose ads appear, which can lead to negative press
Revenue High CPMs. Kevel's clients average $5-$10, with some niche publishers able to charge $100+ Low CPMs. Generally average < $2

Where can sponsored listings go?

There are five usual places that brands put sponsored listings: search results, browsing results, the homepage, product pages, and e-mails.

Search Results

Search results are a natural placement for sponsored listings, with advertisers choosing what search terms they want to bid on (like Google's Adwords). Given there's an "intent to buy" when a user searches for a product on an eCommerce site, this placement is of high value.

For instance, the shoe brand Mizuno currently pays Amazon to be the first result for a search of "mens running shoes". This is a wise move, as organically the first Mizuno shoe is result #70. Without that paid placement, Mizuno would likely have very few sales, if any, from people making that search.

reebok ads

Browsing/Category Results

Sponsored listings can also be placed in specific category sections as someone is browsing the site. While not technically a search, category browsing indicates intent and can ensure relevant targeting.

capterra ads

"You May Also Like" Sections

Many sites have an "Other Products You May Like" section on their product pages. There's no reason that vendors - whether competitors or complementing products - wouldn't find value promoting themselves in these slots.

amazon ads

Drop-Down Menus

Most eCommerce sites have drop-down menus for browsing by category. These menus are great spots to throw in product ads on the far right that are relevant to the category the user is scrolling over.

submarino ads

Homepage Carousels

A prominent placement on a site's homepage is a great way for a brand to raise awareness and drive clicks for its products. Additionally, e-retailers can charge high premiums for this coveted spot.

coupang homepage carousel


Finally, incorporating sponsored listings into e-mails can drive new revenue without disrupting the email experience. There's a sizable payoff for little work here. For instance, let's imagine this scenario:

  • Background: You have 10M subscribers to your weekly e-mail (with 20% open rate), which you use to feature products. You decide that in each e-mail one of the eight products will be sponsored, and you speak with your vendors to see who's interested in paying for that spot.
  • Work Involved: The technical integration shouldn't take longer than a couple weeks, and a single person could spend just hours a week managing it.
  • Incremental Revenue: Let's say your vendors agree to $10 for every thousand opens.

Given this, each week you'll make $20K:

  • Opens: 10M @ 20% open rate = 2M
  • Revenue: (2M / 1000) * $10 = $20,000

That's about $250K more revenue a year, nearly all profit, and requiring no additional hires.

bed bath beyond email ads

How do companies sell sponsored listings?

Sponsored listings are generally sold either via a self-serve platform or direct sales. The best choice for a retailer boils down to how much control they want. For instance, marketplaces tend to offer self-serve platforms within their seller portal. This makes it easy for anyone to upload an item to sell, put in a credit card, and pay for extra promotion.

self serve ads

Other brands prefer handling the advertisers manually, with a small team dedicated to securing deals and managing campaigns using an internal UI. This offers more control over who is advertising, how they price/invoice, what spots they sell, and so on.

For instance, Patagonia could work with REI to create Patagonia sponsored listings to be promoted in relevant searches, on the homepage, and in e-mails.

Given the potential size of the deal, it may make more sense for an internal REI business team to manage the campaign themselves, so as to provide a more hands-on experience.

How do companies build a sponsored listings product?

The large sponsored listings platforms - including eBay's, Amazon's, and Etsy's - were all built in-house and took years to launch. The time required to create sponsored listings isn't minimal, as it entails building ad pacing tools, revenue optimization algorithms, reporting features, forecasting tools, and more - not to mention having to deal with server costs as one scales, IAB certifications, GDPR compliance tools, and so on.

There are a couple of widget-based ad networks that enable sponsored listings, such as PromoteIQ (acquired by Microsoft in 2019) and Criteo. These options are good for retailers who want to outsource the tech and vendor relationships in order to launch faster. The trade-offs are that they lose flexibility to design a robust platform, have to deal with page-slowing JavaScript tags, will see lower revenue since networks take a rev-share, and can't build white-labeled self-serve platforms with them.

For brands that want to own their sponsored listings tech but don't want to wait years to launch, Kevel does offer API access to a suite of ad serving tools that make it possible to launch a sponsored listings product in just weeks.

Final Thoughts

Sponsored listings revenue isn't going to vault a company to Top 25 by itself, but successful server-side ad programs can drive meaningful revenue, enabling brands to offer lower prices, capture market share, and drive organic growth.

That said, it could also be that higher-grossing companies have more time and funds to build out these platforms, regardless of how effective they are.

Whether or not this amount proves enticing will depend on the retailer, but, at the very least, sponsored listings are a low-risk, high-return ad unit that enables brands to drive new revenue without having to resort to obtrusive programmatic ads.

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