EBay Changing Affiliate Program To PPC Based “Quality Click Pricing”

by trigatch4 on August 19th, 2009

ebayA lot of folks followed my phpBay tutorial which utilizes the EBay affiliate program so I figured now would be a good time to break the silence on myblog: EBay has just sent out a letter to all affiliates outlining a sweeping change in the way they calculate earnings and payments of affiliates.

Under the new system, each affiliate will be assigned a CPC value based on the quality of their previous day’s traffic. EBay will not only take into account the revenue earned from the transaction, but whether the affiliate DIRECTLY impacted the sale and/or the potential value of adding new customers to the EBay program as customers.

Existing EBay affiliates will be pushed to the new program October 1st whereas those signing up after September 1st will go immediately into the Quality Click Pricing System.

Here is the Email I received:

Dear Rob Jackson,

Today we’re announcing Quality Click Pricing, a new payout structure designed to further reward the affiliates who drive incremental transactions on eBay and who send valued buyers to our sites.

What’s Quality Click Pricing?

Until now, eBay Partner Network has paid for sales and leads. With Quality Click Pricing, we will now instead pay affiliates for each click sent to an eBay site. The price paid per click will still depend on the short-term and long-term revenue of the traffic that the publisher drives to eBay, but will now also take into account the incremental value of that traffic to eBay, i.e., whether a sale happened as a direct result of the publisher’s actions. The greater the incremental revenue and the higher the expected lifetime value of the customers an affiliate sends, the higher the EPC and total earnings the affiliate will receive. Earnings Per Click (EPC) will be set daily for the previous day’s traffic.

When will this change take place?

We plan to phase the introduction of Quality Click Pricing to ensure existing publishers have enough time to understand how this affects them.

  • New publishers that join the eBay Partner Network as of September 1st will be paid out under the new system. This includes all publishers joining as they transition from TradeDoubler and affilinet.
  • Publishers that joined eBay Partner Network prior to September 1st will remain on the current pricing system until October 1st, when they will begin to be paid under the new Quality Click Pricing payment structure. Before October 1st, and starting the last week in August, existing publishers will have access to a preview report to see how their new payouts compare with the existing payment structure for them.

How can I find out more about this change?

We know that you may have questions about Quality Click Pricing, so we have put together several resources to give you more information about it:

  • Read more about this change and some of the reasons behind it on our blog, including a FAQs document.
  • A new set of pages on the eBay Partner Network site that explain how Quality Click Pricing works in more detail will be available later today.
  • Two new videos that explain the concept of Quality Click Pricing (one available today and a second that will explain new reports on September 1st).
  • In addition, we will hold two live webinars to explain the change and give publishers the opportunity to ask questions. Find out more about the webinars.

We will also be on the boards more frequently over the next few days to answer publishers’ questions.

We are very excited about the launch of Quality Click Pricing, as it will allow us to reward publishers who are driving high quality, engaged and incremental traffic to eBay. We are also committed to continuing to invest in helping our publishers succeed with eBay Partner Network, and to ensuring that everyone is rewarded fairly for the value they generate for eBay.

We look forward to working with you on this new endeavor. Thanks for your continued support!

Sincerely,

Steve Hartman,

The eBay Partner Network

Affiliates had been getting nervous about the broad banning without much justification as to why banning occurred. I think this move serves many purposes:

  • It rewards affiliates referring quality traffic by bumping up their earnings/revenue
  • It punishes poor affiliates by allowing EBay to indicate a low click value thereby just paying them less instead of banning them
  • It will create less reasons to ban affiliates and more transparency, shifting the discussion to how affiliates can generate better quality clicks to earn more revenue

One rather awesome thing to note, stated in the QCP FAQ, is that affiliates will now earn a portion of the revenue EBay makes from advertising on its pages and PayPal transaction fees:

Quality Click Pricing (QCP) will have several positive impacts for many publishers:

• QCP simplifies the commission structure.
• As the payout will be more closely aligned with traffic quality, we will pay more than we do today to publishers that are driving us high quality traffic, regardless of the size of the publisher.
• Publishers will be rewarded for multiple sources of value in addition to sales, such as revenue from advertising on eBay pages and PayPal transaction revenue.
• The EPC will be visible the very next day and will be more stable on a day to day basis.  Publishers will not have to wait up to seven days to see if clicks convert to sales, or 30 days for new users to sign up after a click.

There is also a 16-page PDF which outlines the complete changes and serves as a Guide to Quality Click Pricing. Its pretty interesting to note the type of factors EBay considers when determining “quality” although I’m sure this will change and adapt over time, kind of like the Google Search Algo:

ebay-qcp

There are 4 main changes to the calculation of earnings:

  1. Purchases made closer to the beginning of the 7-day cookie are typically valued more
  2. Leads (getting people to sign up for EBay and buy) are no longer tiered values and are now average payments based on predicted value of the user
  3. The history of your account will be taken into consideration and your EPC will be set on a daily basis depending on your account history for sending quality traffic.
  4. Affiliates now get money for ads appearing on ebay and paypal transactions

Number 3 is the most interesting as it reduces the day to day fluctuation affiliates will see. Now you’ll be getting paid per click and your quality will affect your earnings per click.

EBay identifies a “very low” EPC as .03 or below and might ban you if you consistently fall in this tier. So at the minimum, that is what you can expect to be earning per click. Most affiliates fall in the .06 to .21 tier and the elite typically make .40 or so per click.

Although you won’t be paid under the new model until October 1st (with existing account), you’ll be able to SEE how much you WOULD be making under Quality Click Pricing starting late August… pretty cool!

I’m pretty excited about the changes as all of my EBay endeavors are very targeted and seem to generate pretty quality traffic. I’ll definitely be following this story and making some new phpBay sites to prepare for the switch and monitoring the success. It will be interesting to see how this pans out as we compare to the old EBay earnings/payment methods.

Are you excited or disappointed in the new system?

PS: Shopzilla has been using this method for a long time and its worked very well for me. EBay is like Shopzilla only with a zillion more products to offer… seriously, this could be huge for affiliates pushing decent traffic.

Steve Hartman just sent an EMail further explaining the changes:

Dear Rob Jackson,

Steve Hartman

Following the announcement of Quality Click Pricing, I realize that there are going to be a lot of questions, so I wanted to take a moment to speak with you about why we’re making this change.

Since we launched eBay Partner Network, we’ve continued to invest in the platform and have made many improvements to the quality of our affiliate program. Quite simply, quality in eBay Partner Network means that eBay’s affiliate spend results in incremental transactions and incremental high lifetime value users. Said another way, we are working to make sure that our affiliate marketing spend delivers transactions that would not have otherwise occurred and new high value users who may not have registered on eBay.

We’ve taken a number of steps to make sure that eBay Partner Network delivers on this promise so that we can continue to invest in our affiliate program, but we’ve been missing one key piece: fully aligning affiliate payouts with the true value of the traffic, transactions, and users that they deliver. Our first step towards aligning compensation with actual value was our Value Based ACRU pricing, which we launched in the US last year. With Quality Click Pricing, we will go further; compensating each affiliate not only for the value of your ACRUs, but also the incrementality of the transactions you drive.

By fully aligning our compensation with quality, we hope that the affiliates whose earnings increase under the new payout model will find ways to drive even more of your high quality traffic to eBay. For affiliates who will initially earn less, we’d like to see you test some of our suggestions and work to improve the incrementality of your traffic, as this will increase your earnings and benefit eBay. From our experiences with our beta publishers, we know that with optimization increasing your payout is a real possibility.

We have not taken this decision to change our compensation model lightly. The eBay Partner Network team has put a lot of effort and thought into the move to Quality Click Pricing over the last year, and we’ve involved numerous publishers in a beta program and previews of the system. From the results that we have seen for eBay and for our publishers, I feel strongly that this is a very positive move for the future of our affiliate program and I am personally excited to see the continued improvements in quality that it will drive.

We know that change is not always easy, and that any change like this has a large impact for each of you on a personal level. I’m sure that there will still be additional questions moving forward, and to help address them, we’re setting aside time to engage more with you on the discussion boards, and will hold a live webinar on Friday 21st August at 9am PST. You can visit the blog for more details. I look forward to the dialogue and to continuing to build our mutual success on eBay Partner Network.

Sincerely,
Steve Hartman

I have a weird feeling this is going to turn into an endless barrage of QCP communication and explanation.

1 Comment

  1. 1. larrybn wrote on August 20, 2009

    Nice read I just got the email. It definitely has encouraged me to get out and create more EPN sites since guaranteed revenue per click means that I don’t have to focus on encouraging visitors to sign up/buy straight away.

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