EBay Dumps Old Affiliate Model, Adopts Quality-Click Pricing

Steve Hartman EBay has revamped its affiliate program, replacing the cost-per-lead and rev-share models typical of affiliate marketing with a cost-per-click model.

Changes in the eBay Partner Network have been underway for about a year, since eBay brought the affiliate program in-house to become better acquainted with its top affiliate publishers and forge closer relationships with them. About 20 publishers have begun testing the new model since May. New affiliates will come on board Sept. 1, while existing affiliates will migrate on Oct. 1. The move takes eBay from a cost-per-sale and cost-per-lead model to a quality click-pricing system -- a cost-per-click (CPC) model. Affiliates will be paid for every click sent to eBay, but it's still based on performance. The model considers transactions and registered users that affiliates send to eBay.

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The company had offered a volume-based model for transactions and a quality model for active, confirmed registered users, but eBay felt it was underpaying some affiliates while overpaying others, according to Steve Hartman, senior director of Internet marketing at eBay.

More than 100,000 affiliates are spread across 27 countries, from portals supported by AT&T to small blogs. Compensating affiliates a little differently for each of the 14 programs it offers has been a little complicated, Hartman says. The goal is to simplify the program and to reward affiliates that provide the most value long-term, he says.

Most retailers pay affiliate publishers either a percentage of sale or a per-lead fee, paying for transactions based on volume. Under eBay's old compensation structure, for example, if someone were to click on an affiliate link and make a purchase within the next seven days, the affiliate would receive the same revenue share -- no matter when the event happened within those seven days. Under the new payment model, purchases that happen closer to the click will be rewarded more than those that happen later.

The new program aims to make sure that affiliates are compensated properly as a result of the traffic they send to eBay from their sites.

The revenue share has been based on between 50% and 75% of the transaction revenue based on the volume of referred customers sent to eBay. The pay-per-lead structure is built on a sliding scale from $1 to $50. The compensation models now will rely on an earnings-per-click (EPC) model. Affiliates will receive transaction information and confirmed registered users, along with EPC data per campaigns to manage programs and budgets more effectively.

Another change to the program is that eBay will make the EPC available the next day. Affiliates will not need to wait up to 30 days for clicks to convert to revenue. The payments will more closely align with traffic quality, meaning that eBay will pay publishers who drive incremental activity regardless of size. Payouts will factor in revenue streams beyond item purchases, including eBay advertising revenue and PayPal revenue resulting from increased traffic and transactions.

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