eBay's partner network has undergone some changes recently, starting with severing ties with Comission Junction in April, 2008. That effectively moved all their affiliate data in-house, and now they've put it to good use.
Today eBay announced "Quality Click Pricing" - a new payout structure for all eBay partners, with the exception of Half.com. Earnings will now be calculated incrementally as a factor of earnings-per-click (EPC) on a daily basis. Instead of focusing solely on sales, eBay now looks to reward affiliates who are driving quality traffic.
In the past, earnings were based on sales and new active confirmed registered users (ACRU). So, affiliates were paid on a final sale basis and for those new users who signed up to eBay. Now, these factors are rolled into one system, EPC.
For example: Publisher "A" generates 10 clicks to eBay resulting in two new registered users and one sale. Publisher "B" generates 50 clicks to eBay resulting in 20 new registered users and 12 sales. Publisher "B" now has a higher EPC (including final sale, ACRU and a few other factors) and will be paid a higher percentage than Publisher "A". However, as this is all calculated on a daily basis, Publisher "A" could have a better day tomorrow and increase his EPC.
According to the press release, "Instead of paying you along two compensation schedules (ACRU and revshare), we will now begin paying you under one unified pay structure that collectively incorporates both sales/revenue generated and ACRU activity (and a few other things). Quality traffic that drives incremental sales and user engagement will play large roles in [your ultimate payout.]"
The factors to determine "quality" for eBay include some of those listed below.
- Short term incremental value
- Traffic that drives sales and revenue for eBay in the first few days after a click
- Purchases that are likely a direct result of the publisher's marketing efforts
- Includes revenue generated by purchases, can extend to PayPal and onsite advertising
- Engagement of those users on eBay
- Long term incremental value
- Revenue generated by traffic directed to eBay beyond first few days after click
- Long-term value of ACRUs
For affiliates and publishers there are several benefits to this new systems, as well as a needed philosophy shift. First, the benefits.
- EPC will usually be visible next day - won't have to wait up to 30 days for clicks to convert to ACRUs
- Payout more closely aligned with traffic quality - we'll pay more to publishers who drive incremental activity, regardless of their size
- EPC now visible at campaign level to allow for campaign-level optimization
Considering this new system, publishers and affiliates now need to consider the quality of traffic sent to eBay, not just the quantity. It would, for example, benefit the publisher to refer those users who have the best chance to continue to visit eBay on a long-term basis (through your site, of course) which would, in turn, boost the long-term incremental value of the traffic you refer. This places much value on building a consistent brand experience for users, rather than trying to sell a few "hot" items regardless if it matches your brand's mission.
eBay's new Quality Click Pricing is a good development. Those publishers who truly work at their craft will be rewarded in a way more consistent with their overall marketing and branding efforts. It's not only long-term incremental value for eBay but forces you, the publisher, to think about lifetime customer value.
Besides that its commission structure was complicated and needed to be simplifed, eBay needed to create a commission structure that can "grow with us as eBay expands into classifieds, advertising, and non-transaction sources of revenue," according to the release. Interesting choice of words and a hint that publishers should be thinking about long-term partnerships with eBay, not just quick sales.