eBay Introduces Quality Based Pricing
Last week eBay Partner Network introduced Quality Click Pricing, a new quality-based Cost Per Click (CPC) payout model designed to reward top affiliates. The goal was to simplify its commission structure and raise the quality of traffic driven to eBay sites through the affiliate program.
In contrast to eBay’s current Cost Per Action (CPA) system, Quality Click Pricing rewards affiliates based on the value of the traffic they send to eBay ( i.e., the incremental transactions 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.
Steve Hartman, Senior Director of Internet Marketing at eBay says:
“Affiliates make eBay more vibrant by highlighting the great inventory and values to potential buyers across the web, which helps drive success for our sellers. This is why we built eBay Partner Network and why we’ve continued to invest in its technology and infrastructure with things like Quality Click Pricing.”
It’s no secret that eBay has been researching ways to better reward quality over quantity. In fact Steve Hartman brought up that notion as a panelist at Peter Bordes’ keynote presentation at Affiliate Convention in Denver.
Peter released a statement as well:
“eBay is leading the way forward for the affiliate marketing industry through the steps it has taken to improve the quality of traffic driven to its sites through affiliates. Should other merchants and affiliate networks follow suit, the entire performance marketing industry would benefit as a result.”
I think eBay is definitely onto something with this strategy. As an industry we are constantly fighting the battle of bringing advertisers qualified usable traffic. Sure, volume is great, but if most of it is junk, then nobody really wins in the longterm. It will be interesting to see how this new model pays off for eBay and if other companies follow suit with the same blueprint.
23 Comments, Comment or Ping
Contempt
Here’s something I don’t understand. They’re moving from a system that only pays when a purchase is paid for, to a system where people are paid on traffic regardless (even if .01). How is this going to justify the “As an industry we are constantly fighting the battle of bringing advertisers qualified usable traffic.”?
Personally I see this as going backwards. They’re going to lose a lot of affiliates with this change, at least from what I’ve seen and heard so far.
Aug 24th, 2009
Scott Parent
Just so I understand – you think that putting a premium on quality leads is a step backwards? If the industry is going to move forward and be seen as a safe place for brands to do business, then it is an absolute must to address these issues.
Aug 24th, 2009
mediatrustpete
eBay Introduces Quality Based Pricing http://tinyurl.com/oe4s58 new innovation in affiliate marketing #affiliatemarketing #ppc
This comment was originally posted on Twitter
Aug 24th, 2009
Contempt
Well yeah I do understand that, I must not understand the transformation completely. The whole point that I’m aiming towards is that instead of being paid for performance, we’re being paid off of an algorithm that we have absolutely no idea how it works or how it calculates. The whole point of me running EPN instead of something such as ShopZilla is to be paid for performance, not per click.
If I wanted to be paid per click I would have stuck with AdSense and their random smart pricing. Google can say that someone on adwords paying $1.00 a click is worth only $0.04 to me, but the next day it’s worth $0.74. How do they calculate that? There’s no way for us to know, or how it works, why, etc.
I completely believe that paying a premium for quality leads is a great step forwards. But why can’t they do that on rev-share like they are now? Getting paid on the spot for exactly how much they made is the whole point of me running it. I don’t want to send customers worth $500 today and make $10 because it was based on ‘yesterday’s value’. On the same respect, sending $500 today and getting paid on three times the traffic that hardly converts as well on the next day wouldn’t exactly go well for eBay.
Personally I just see this as something that hasn’t been completely thought out. The concept behind quality based pricing is perfect, but not in this sense. I don’t know, it’s still early but that’s just my take on it.
It’s completely possible that I just don’t know as much about it as I think I do, or I misunderstand it, etc.
Aug 24th, 2009
Scott Parent
That was a great comment. The reality is that I haven’t dug too deep into how it works in practice. I understand the theory and why it is being put in place. How will that translate into the real world? No idea… That’ why I think that companies are going to be watching the rollout closely. If it results a huge loss of publisher base and the execution is flawed, then that isn’t good for anyone.
Maybe Steve from eBay can comment here and help ease your concerns.
Aug 24th, 2009
Websearch
[blog] eBay Introduces Quality Based Pricing | Mediatrust Blog http://bit.ly/3lGIe
This comment was originally posted on Twitter
Aug 24th, 2009
Contempt
I know for a fact that 90% of the EPN publishers I talk to on a daily basis are jumping ship once it goes into practice. The industry is based on knowing where the money is coming from and why it triggers, not mystery payments. By the way, the other 10% of the EPN publishers (myself included!) were falsely banned from EPN. Their program needs a LOT of work done, and I’ve even offered to help them several times (talking to their staff at trade shows, etc) because I know you can make the system itself insanely profitable.
But yeah, overall I can’t wait to see how this rolls out and works. It will make or break the program, but given how much it’s gone downhill in the last few months from everything I’ve heard, I’ve got a small bet on breaking it. EPN’s reputation hasn’t exactly been getting better lately. Falsely banning good publishers, no communication, etc. It’ll certainly be interesting to see how it plays out.
Aug 24th, 2009
sellerwise
eBay Introduces Quality Based Pricing | Mediatrust Blog: Last week eBay Partner Network int.. http://bit.ly/f824q
http://bit.ly/3lXfBG
This comment was originally posted on Twitter
Aug 24th, 2009
gcastillodiaz
eBay Introduces Quality Based Pricing | Mediatrust Blog http://tinyurl.com/oe4s58
This comment was originally posted on Twitter
Aug 24th, 2009
bigdigit
eBay Introduces Quality Based Pricing | Mediatrust Blog: Payouts will also factor in revenue streams beyond item.. http://tinyurl.com/oe4s58
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Aug 24th, 2009
AuctionAction
eBay Introduces Quality Based Pricing | Mediatrust Blog http://tinyurl.com/oe4s58
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Aug 24th, 2009
pmalliance
eBay Introduces Quality Based Pricing Affiliate PPC Program http://tinyurl.com/oe4s58 #affiliate #ebay
This comment was originally posted on Twitter
Aug 28th, 2009
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