Yucca

A new affiliate dawn?

There is a new tracking methodology in town and eBay pioneered it.

I blogged a few weeks ago about an eventual move to a truly fair tracking attribution model that should see the light of day in 2011. However, for now, the most interesting model in the market has just been launched by the Kings of Tat, eBay (and I mean Kings of Tat in an affectionate sense – I love having 20 tea cosies).

In October 2009, eBay introduced to its 100,000+ worldwide affiliates a new Cost Per Click (CPC) affiliate tracking methodology called Quality Click Pricing. The commission paid to the affiliate depends on the quality of the traffic they create, so the more incremental revenue the traffic generates for eBay, the higher the amount paid per click to the affiliate.

There are two main components to determining the CPC for each eBay affiliate:
1. Short term value. Namely incremental sales revenue, incremental Paypal revenue (eBay owns Paypal) and incremental ad revenue. Notice the focus on the word incremental.
2. Long term value. Namely the number of incremental new users, lifetime value of those new users, and user engagement with eBay.

As a result of the above algorithm, an individual affiliate’s specific CPC will update daily; one day an affiliate may earn 7p for every click they send to the eBay site, while the next day they may earn 9p per click.

The system is based on rewarding affiliates who generate clicks that are truly relevant to the product that is eventually purchased, helping to identify clicks that create genuine value. For instance, if you were an affiliate running a site about Apple Macs, and within 15 minutes of a visitor arriving at your website they went and bought a Mac mouse from eBay, you would get paid more money for that sale than if the same user went on to eBay and bought a toy motorbike 7 days later.

Are there any problems? Well unfortunately, the model still works on a last click wins basis. I asked Chris Howard, eBay’s Senior Manager for Affiliate marketing in Europe about this and he noted that, whilst he does not discount an attribution model in time, for the medium term it has to remain as a 7 day cookie which rewards the affiliate on a last click wins basis. Like many affiliate managers, I’d like to see this changed one day soon.

My other main issue with the eBay system is that to employ and maintain this kind of technology takes A LOT of resource, and I’m not sure many merchants would be able to justify this way of working.

What will make things interesting is if it becomes clear that this system is a mere stepping stone, with eBay, or other large merchants and affiliate networks evolving a fairer attribution model across the sales funnel – now that will be ground breaking!