EcommerceBytes-NewsFlash, Number 2100 - August 19, 2009     3 of 4

eBay Affiliate Program Rolls Out 'Quality-Based' Compensation

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eBay is rolling out a new pricing structure for its affiliate program, calling it Quality Click Pricing. The eBay Partner Network said its new "quality-based" Cost Per Click payout model is designed to better reward top affiliates, simplify its commission structure, and elevate the quality of traffic driven to eBay sites through the program. eBay Senior Director of Internet Marketing Steve Hartman told AuctionBytes the change would not be a great departure for many of the company's top affiliates.

eBay is moving away from paying out affiliates based on Cost Per Action - cost per sale and cost per lead (ACRU). The new Cost Per Click (CPC) model uses a proprietary algorithm based on various factors that eBay has determined measure the quality and lifetime value of the traffic and transactions:

"Quality Click Pricing rewards affiliates based on the value of the traffic they send to eBay, i.e., the incremental transactions and incremental high lifetime value users that result from their traffic. Payouts will also factor in revenue streams beyond item purchases, including eBay advertising revenue and PayPal revenue resulting from increased traffic and transactions."

Affiliates will continue to see reports showing traffic numbers and ACRUs, but payouts will be shown as "Earnings Per Click" (EPC) that reflect all of the factors eBay uses to measure the quality of the traffic.

eBay is also adding a way for affiliates to measure their results at a campaign level so they can compare the ROI of different types of campaigns, such as paid search versus other affiliate earnings. Another change will affect very small publishers: it will give a set average EPC to those sending less than 20 daily clicks to eBay.

eBay has over 100,000 affiliates in 27 countries who use a variety of business models to earn affiliate revenue. Last year, eBay launched a new pricing structure for rewarding affiliates for Active New Registered Users. Previously, eBay had rewarded affiliates for ACRUs based strictly on volume; after it moved to "value-based" tiers, eBay found that the number of new users referred by affiliates qualifying for the top two tiers increased by 80 percent, and the number of new users in the lowest tier decreased by 86 percent. Hartman said the results demonstrated that the change to the program improved the quality of the traffic affiliates sent to eBay.

The change to a value-based payout for ACRUs and other changes have been controversial among members of the eBay Partner Network, and these changes may well cause concern among affiliates as well. And sellers worried about eBay's traffic trends are likely to be concerned about additional changes to a program designed to bring buyers to the site.

Hartman said eBay expects affiliates who drive quality traffic to eBay would see higher rewards, and those who drive lower-quality traffic would see a decline in pay.

All new affiliates joining eBay Partner Network as of September 1, 2009 will automatically be paid out under the new Quality Click Pricing structure, while existing affiliates will not begin under the new structure until October 1, 2009.


About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.


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