I had a very interesting chat with the lovely Julia Nisted yesterday. She is one of the 5 strong team who runs the eBay affiliate programme throughout Europe in partnership with a variety of local agencies (including our very own R.O.EYE).
My apologies for being slow out of the blogging block on this, but I find it almost impossible to make any sense after 5pm these days. Just ask anyone who has spoken to me on MSN in the Aussie evening! The announcement that they are to scrap their current commission structure and introduce a shiny new CPC model was made at 1pm yesterday afternoon. Now, before you all dust off your ads for bizarre products such as used loo paper, fanny magnets, and blue bums (I have old screenshots to prove these existed), this is no ordinary CPC model.
Quality Click Pricing (Or QCP – affiliates do love a good abbreviation and eBay have obliged)
What is it & How is the CPC Defined? Understandably enough, eBay shan’t be making the exact nature of the algo used to determine click quality public. However being an expert on just about everything (no sniggering at the back of class please!) I shall endeavour to explain.
In a nutshell the CPC eBay are prepared to pay will depend on traffic quality. If your traffic brings in the goodies in the form of healthy sales and the provision of long term repeat customers, then you’ll get a higher CPC than people who simply scoop up every bit of random traffic they can find and shove it in eBay’s general direction.
In typical affiliate style my first question to Julia was, “So is this about eBay saving money on their affiliate programme?” However, she assured me that this is, in fact, all about rewarding affiliates who drive good traffic and they hope it will ultimately result in eBay paying more out to them. They don’t want to lose the affiliates driving “bad” traffic either – but they do want to encourage them to improve their traffic quality.
The new system will be implemented on 1st September 2009 so there’s plenty of time to get your heads around it. You can read more about it on the eBay Partner Blog and also grab some handy tips on how to improve your traffic quality.
From My Point Of View…
It sounds like an incredibly positive change to the programme structure. Regular blog readers will know I always view any change that asks affiliates to raise the bar as a good thing for the industry and the way affiliates are perceived. To me, paying for the quality of traffic seems like a very fair way to apportion commission and it certainly makes eBay a more attractive affiliate proposition.
The changes seem incredibly innovative and it will be interesting to see how they develop!
As an aside… My year to date earnings for a niche site of mine on the eBay affiliate programme are a whopping £17.32 – however it may make an interesting case study later as it’s for a product / products that I know people in the UK can only purchase there.
So more from me on the changes and their effects later this year 
August 20th, 2009 at 9:23 am
Great summary Kirsty. Reminds me of Shopping.com’s move to value based pricing in many ways. http://developer.shopping.com/page/ValueBased_pricing/.
August 20th, 2009 at 9:29 am
Meant to ask you, no plans to add a tweet / retweet button to your award winning blog? Such as http://wordpress.org/extend/plugins/tweetmeme/
August 20th, 2009 at 9:32 am
Thanks Steven, I really should, shouldn’t I? I’m so rubbish at remembering to do these things. This is a downside of having one site you don’t make any money from, LOL.
August 20th, 2009 at 9:52 am
Hi Kristy, I have no problem with rewarding affiliates based on traffic quality. The problem is this sort of pricing structure is not very transparent. If I give eBay a lifelong customer, how can they reward me with ONE CPC payment? Eg. The customer looks good so let’s give Tim a CPC of $5 for this customer… that customer visits eBay for the next 30 days and buys $10,000 worth of stuff. How did the initial CPC payment reward me for that customer? I like the old 30 day cookie structure better because you only get paid when they register, bid and win. With this new structure, who knows!
August 20th, 2009 at 10:00 am
Fair point / concern Tim. I’m not a seasoned eBay affiliate, but they have Beta tested it with some of their affiliates and if it isn’t going to work properly then ultimately their programme will suffer and lose affiliates who decide they can better monetise their traffic elsewhere.
Only time will tell how this new algo will pan out when it’s launched over the whole affiliate base. If it does what they say it will do, I think it can only be positive.
August 20th, 2009 at 10:46 am
Hi Tim, you are correct in the fact that you can not be rewarded for a valuable lifelong customer in one CPC payment. You will however be rewarded with a higher CPC over the following days / weeks when the value of the customer has been determined by eBay. If you would like to discuss this in more detail please feel free to get in touch c.worthy@ro-eye.co.uk
Chris Worthy
Senior Programme Executive – eBay Partner Network
August 20th, 2009 at 10:49 am
I like it. It shows the fact CPA does not always mean ROI+ for merchants: by paying CPC dynamically you can rewards affiliates for the true incremental value of the traffic (if the merchant is smart enough to evaluate and calculate this).
August 20th, 2009 at 10:54 am
I just suspect it’s an excuse to pay less. These are recessionary times no matter how many green shoots the government pretends there are.
Surely a way of rewarding quality traffic is paying for sales? The basic principal of affiliate marketing is that you only pay for sales.
August 20th, 2009 at 1:19 pm
My glass is half empty on this too.
Up until now EPN paid purely on results, signups and commission on sales. In what way does that fail to reward quality traffic?
As for not losing sites with poor quality traffic, EPN will retain them as long as they pay more than their competitors.
August 20th, 2009 at 3:52 pm
Hi Diane,
On the point about paying less to affiliates, that’s definitely not what QCP is designed to do, in fact it’s the opposite! It’s true that some affiliates will be earning less than they are at the moment, but many others will be earning a lot more than before. Also, in the UK, we are using this as an opportunity to actually increase our overall payout to affiliates. On the point about quality traffic equals sales, while for a lot of merchants that may be true, but for a site with the reach of eBay and a cookie latency of 7 days to take into account auctions, not all sales are of equal quality. For example, if you have a site about golf and an hour after clicking on an eBay link, someone buys a golf club, then this is likely to be as a direct result of that person being on your site. However, if someone clicks on an eBay site, then only after 6 days buys a cuddly toy, then this is far less likely to be anything to do with the affiliate’s marketing efforts. Hope this explains things!
August 20th, 2009 at 6:06 pm
Really interesting to see another big affiliate merchant head in the direction of CPCs (over CPAs). As Steven mentions above, that is similar to shopping.com’s affiliate model, but also the Shopzilla.co.uk affiliate model (a lesser known-program because it’s only been around a few months).
While I agree with all the points Kirsty makes about the how this model creates an excellent alignment between affiliate and merchant in terms of quality, another point to be stressed is that it effectively transfers some risk from the affiliate to the merchant (ebay/shopping.com/Shopzilla.co.uk).
In the traditional model of CPA, the affiliate assumes all the risk of sending quality traffic to the merchant; bad quality traffic = no sales = no commissions. With the CPC payment model, the merchant takes on some of that risk, paying much more frequently (per click instead of per sale). In the end, the CPC model provides a steadier stream of revenue to the affiliate, with a mechanism (QCP) to ensure that traffic quality remains consistent with the revenue paid to the affiliate.
August 21st, 2009 at 4:00 pm
“So is this about eBay saving money on their affiliate programme?” – Of course it is!
August 23rd, 2009 at 10:34 pm
Been reading your blog for awhile now and really enjoy the read.
As for this issue, I really hope that it is not just the big guns who are rewarded and it is fair across the playing field.
Its always a good thing to raise the bar but I just hope it isn’t to far for some of the smaller fish.
August 28th, 2009 at 11:57 pm
Well, after reading Julias comments above, and given my traffic is all organic SEO, people looking to buy stuff I was optimistic about Ebays new Quality Click Pricing… just got my first peak at the “Preview Report” and im down to just 45% of what I was earning…. less than half.
Will be watching what other people report with interest.
Had been planning a lot more ebay stuff over the next few weeks, but will be promoting other merchants now…
August 30th, 2009 at 9:26 am
I’ve been anxiously waiting to see the preview report like the rest of you but in my case I needn’t have worried. My income looks like going up by around 50%. For the US programme it’s up by 25% or so but the biggest jump is in the European programmes: 100% UK and for Spain and Italy the jump is huge, from around £2 for the period 18-28 August to over £30.
When Germany, Austria, Switzerland and Ireland come on board ePN in September I should be able increase that figure of 50% even more. Although my website is in English is has international appeal.
September 3rd, 2009 at 1:08 pm
Well… mines gone up from 45% of my old earnings to over 200%, quite a swing, so, for the time being I’m happy…. but who knows what tomorrow may bring…
I think the issue with these reports at the moment is lack of data… hopefully as time go’s by the prices will settle down a bit.
September 18th, 2009 at 2:25 pm
It seems the European swings were a result of eBay incorrectly converting from €
September 18th, 2009 at 2:29 pm
It seems the massive increase in European commissions I was seeing was the result of a cock-up by eBay of exchange rates so my growth is not quite as large as I has previously reported (and hoped!), but it’s still up. In October when QCP goes live it will be hard to tell if changes to commission are as a result of QCP or the time of year.