This morning the eBay Partner Network announced major changes to the way it will pay publishers on referrals and ACRUs (active confirmed registered users). This is one of the largest changes made to the affiliate program since eBay severed its ties with Commission Junction in April 2008 and brought the affiliate program in-house.
Starting on the first of September for new affiliates—and on October first for existing affiliates—a new pricing structure for all eBay Partner Network programs, excluding Half.com, will be paid under the newly announced "Quality Click Pricing" structure.
Currently eBay affiliates can earn anywhere from 50 to 70 percent of eBay's revenue on a referred transaction and anywhere from one to 50 dollars for each ACRU.
The new pricing, which is designed to better reward publishers sending quality traffic to eBay, is based on EPC (earnings per click), instead of eBay’s current CPA (cost per action) payout structure.
Daily Locked EPC Rates for Publishers
Will Martin-Gill, eBay's director of Internet marketing, said that under the new Quality Click EPC pricing structure, commissions are calculated based on incremental revenue that a publisher’s traffic generates for eBay. The higher the quality of the traffic an affiliate drives to eBay’s sites, the more the affiliate earns.
Gill said that the eBay Partner Network is able to accurately predict the value an affiliate brings to the partnership, and each day the affiliate is locked in to a daily EPC rate. This is a big change from the current system where clicks are not calculated for seven days and statistics for new users are unavailable for 30 days.
Going forward, affiliates will be paid based on the value of the traffic they send to eBay, factoring in the incremental transactions and incremental high lifetime value of the users that result from their traffic.
The algorithm used to determine the quality of traffic will consider many factors, including referral traffic that drives eBay sales in the first few days after a click, as well as purchases that are likely a direct result of a publisher’s efforts. For example, a motorcycle blog that sends traffic resulting in purchases within related eBay categories in the days following the click would fit those criteria.
For long-term incremental value, eBay will consider things such as the revenue generated by traffic directed to eBay beyond the first few days after the click, as well as the long-term value of ACRUs.
The new payment structure will also extend to PayPal and to eBay onsite advertising. This change will let publishers earn a cut from things like lead-generating classified ads where transactions would typically take place off-eBay.
EBay Benefits, but Will the Affiliates?
With this type of a payment structure, some publishers will earn more and some will lose—but eBay expects to reap the benefits of this new pricing structure.
Gill said that the eBay Partner Network (funded by eBay’s marketing budget) is not looking to save money under this new payment structure by cutting the amount of money paid out through its affiliate program—instead, it expects to spend more of that money on the publishers who drive quality traffic with a lifetime value to eBay.
“It is really a case of better ROI. We want publishers to engage users and to be smart about how they use eBay ads,” said Gill. “It is money well spent when we invest more in the publishers who are engaging users in the right way.”
EBay also expects that the new payment structure, in addition to new click fraud measures being taken by the eBay Partner Network, will have a big impact on black hat affiliates. Black hat affiliates are ad-spammers who set up pages just to get that referral click.
These types of affiliates, according to Gill do not send quality traffic and valuable ACRUs to eBay, and the under new payment structure it will be difficult for them to game the system.
Publishers with less than 20 clicks per day will find their EPC derived from an average EPC from all small publishers and campaigns. These publishers, who typically earn anywhere from five to less than 100 dollars per month under the current system, will need to up their campaign to get over the 20 click threshold to be paid based on their own calculated EPC.
Gill says that the new payment structure has been in the works since Q3 of last year, and has been beta-tested by a number of publishers since May. Overall, he said that the publishers were mostly happy with the changes—even though one of the larger affiliates in the beta had to optimize its campaigns to bring earnings back up.
The new Quality Click commission plan fits with eBay’s overall goal of increasing the quality of a buyer’s eBay experience, and when a customer lands on eBay as a result of a spam-ad; that is not a positive eBay experience.
The new payment structure should curb those types of affiliates, while making commissions better for publishers who consistently drive high-value traffic to eBay.
Vangie Beal is a veteran online seller and frequent contributor to ECommerce-Guide.com. She is also managing editor of Webopedia.com. You can tweet with her online @AuroraGG.
IE 7
Firefox 2.0
