A few days ago classified website Kijiji, a subsidiary of Ebay, announced that they received 2.3 million U.S. visitors in January and became the 6th largest classified website in the US. Within 6 months Kijiji became about 10% of the size of Craigslist ( 26.7 million unique visitors in the U.S).
For me these numbers are not very surprising. Kijiji did an incredible job outside the US and their paid search team is one if not the best in the world.
On top of that Google and Co. try to squeeze more and more money out of search and treat their (large) paid advertisers
better than the rest of us as good as possible.
Especially when the advertisers sites include contextual advertising like Adsense, it’s known that the advertiser can receive larger payouts than the general Adsense partner (I lost the source, but Ebay’s Gumtree got a special deal with Adsense, so I assume that Kijiji does as well).
Overall the results are not really a surprise, but what’s way more interesting is that most of Kijiji’s US traffic is not organic (at this point). It’s a matter of time (and money) until Kijiji beats competitor Craigslist. Even if most people sitting at the peanut gallery predict that it won’t happen.
Nowadays long-tail bidding for large advertisers can be done in such an effective way, that organic traffic becomes obsolete. Especially for sites, that live of niche long-tail keywords like Craigslist.
I would not call Kijijis’ PPC bidding arbitrage, but the shift to paid search in combination with contextual advertising is a sign that the industry “matured”. The time when a lot of small sites made it big through organic traffic is certainly over.