eBay Launches Quality Click Pricing (QCP)

We have been speaking to our bronze sponsor eBay Partner Network and are pleased to be one of the first to announce their new payment model, Quality Click Pricing, which is launching on 1st September. You can find out more below in the article induced in today’s a4uexpo newsletter.

How incremental is affiliate marketing and other difficult questions

Because merchants pay affiliates only when a lead or a sale takes place, those of us in affiliate marketing have always been rather smug about our profitability for both advertisers and publishers, especially when we compare ourselves to other marketing channels. And for the most part we’re right to be – it’s this that has made the channel one of the fastest growing segments of online marketing worldwide.

But what if we delve deeper and start asking ourselves some more difficult questions? For example, how do we know that it was the affiliate’s marketing efforts that generated the sale or lead? Asked another way, would these actions have happened anyway? How does a merchant know whether they are paying the right amount for the leads an affiliate is driving? And why do most affiliate programmes pay larger affiliates more per sale or leads than smaller affiliates, when smaller affiliates often drive higher quality traffic?

Those of you who attended the eBay Partner Network presentation at the a4uexpo in Amsterdam, or who read our blog, would know that these are questions we have been asking ourselves for a while. We believe that only by answering these tough questions can affiliate marketing reach its full potential.

So, why is quality important in affiliate marketing? Affiliates have a huge influence on the quality of the traffic they direct to a merchant’s site. The business model and user experience of your site, how you drive traffic to your own site, and the landing page to which you direct visitors on the merchant site, all have an impact. To encourage the right behaviour, most affiliate programmes and networks, eBay included, continually develop tools for their affiliates, and help affiliates to optimise through direct account management, newsletters, emails and blogs. Conversely, the affiliate industry has tended to manage low quality traffic issues through programmes’ terms and conditions, censuring or expiring those who break them. Whilst both approaches are vital, we believe that they do not do enough on their own to incentivise good affiliates and discourage bad ones. From our experience, affiliates will drive whatever you compensate them for. In other words, the best way to adjust affiliate behaviour is by aligning their incentives with those of the merchant.

eBay Partner Network’s answer to these questions is the launch of a new global payment model called Quality Click Pricing on September 1st. Rather than paying per action, we will pay affiliates for each click delivered to eBay. The price paid per click depends on the quality of the affiliate’s traffic. To assess traffic quality, we will look at the incremental value an affiliate brings to eBay. It’s the word “incremental” which signals a change from the way we have looked at quality in the past. We will now look for purchases and leads that happen as a direct result of a publisher’s marketing efforts. For example, affiliates who drive sales that happen close to the click, or new users that repeatedly return to eBay to shop, will be valued more highly and therefore earn more than affiliates who throw a high number of clicks at eBay and hope that some convert. You can learn more about Quality Click Pricing by visiting the eBay Partner Network blog.

Given that affiliate marketing has always been almost by definition a CPA channel, some people will inevitably wonder if, with this shift to paying per click, eBay is moving away from affiliate marketing. In fact, the opposite is true. Affiliate marketing has always prided itself on being a pay for performance channel – and what could be more performance-driven than aligning the incentives of publishers and merchants? By paying not just for conversions, but for incremental conversions, and adjusting that payout according to the value of leads and sales, Quality Click Pricing will ensure the best performing affiliates will earn more than ever before.

So what does this mean for the wider affiliate marketing industry? Only time will tell, but here are a three things we’re hoping for:

Firstly, we’d love to see more merchants asking themselves the tough questions about the incrementality and value of their affiliate conversions. Rightly or wrongly, many people approach affiliate marketing with varying degrees of scepticism. Until affiliate programme managers begin tackling these difficult questions, that suspicion of illegitimacy will remain.

Secondly, we hope that this will encourage a broader discussion between all parts of the affiliate eco-system – merchants, publishers, networks and agencies – about quality within affiliate marketing. Too often, merchants pay all publishers less than the true value of their traffic in order to protect themselves from the low quality or fraudulent traffic driven by a small number of affiliates.

Finally, we believe that by focusing on driving quality incremental traffic to merchants, the affiliate industry can reach its potential as a bigger channel than either paid search or display advertising.