eBay recently released a report entitled, The Coming Evolution in Affiliate Marketing: A Focus On Quality that as its title suggests, reports on how online businesses are starting to look for more quality traffic, leads and sales from their affiliates. While the report does offer some insight into what is producing a quality customer for online businesses, it is much more about the eBay Partner Network than anything else.
Affiliate marketing is no doubt going through a revolution. The days of garbage affiliate sites filled with banners from 30 different merchants making any money are a thing of the past because of much more diligence in search engines cleaning up their indexes. It is also becoming increasingly more difficult to become a member of certain affiliate networks such as EPN and some CPA networks because they either want to see an already developed and quality looking website actually owned by the applying affiliate or know that you have some experience generating revenue online. Also, it must be somewhat of a burden for businesses to keep a lot of dead weight in their affiliate programs, which is why you see companies such as eBay periodically purge their programs of non-producing affiliates.
In combing through volumes of data that eBay has gathered since bringing their affiliate program in house with EPN, they have come up with some interesting results. eBay is finding that incremental sales (sales that would not have happened if it were not for the affiliate) are often much higher from small affiliates that build quality content sites, than from large volume affiliates that send tons of traffic and produce a huge amount of sales. This tends to explain the often frustrating ACRU (new eBay sign-ups) payouts experienced by some eBay affiliates.
While I’m sure the data gathered by eBay in the last several months as outlined in the above mentioned report has been helpful in peering into the activities of affiliates and helped them better adjust their pricing structures in paying these affiliates, it is woefully incomplete and somewhat flawed. I say this for several reasons but the biggest is that they have not been running their affiliate program and gathering data long enough to really understand what’s going on.
The eBay Partner Network has only been in existence since April 2008 and all affiliates that had links going through Commission Junction had to have everything changed over to EPN by June 1, 2008 (Their original 30 day deadline was extended by an additional 30 days). Couple that with the fact that there was probably an additional month of wild swings in clicks due to spidering activity from search engines needing to be filtered out and assuming data gathering ended by Jan 30th to be able to write this report, and you have only 7 months of good clean information.
How a company like eBay can make such decisions about buying trends through affiliates and payouts for those affiliates when they haven’t even gathered complete data for an entire year, makes little sense. Not only that, it lacks long term thinking that could come back to hurt them. It is especially short sighted when you take into consideration the extraordinary changes in the US economy and on Wall Street starting back in October 2008. Traditional buying patterns may have changed or stopped completely since people have lost their jobs and much of their savings and their investments in the market. A simple example would be that people still shop for merchandise and click-through from affiliate sites to eBay, but are much less likely to buy. They are in effect, window shopping on the web.
The biggest problem many affiliates now have with eBay is with their payouts of new eBay sign-ups or ACRU’s. The way eBay reports these ACRU’s within the affiliate’s EPN interface is the thing that has most affiliates bugged. Affiliates don’t know how much they will be receiving for these new eBay members until the 10th of the following month that they are created in. This makes it difficult for the affiliate to keep track of their revenue actually earn from eBay. For example, in my January Affiliate Income Report I stated my earnings from eBay were $401.92, yet when I received the payout from EPN into my PayPal account towards the middle of February it was $70 less because my ACRU’s were adjusted down from $28 to $10 for each new sign-up.
What’s happening here is eBay is paying out anywhere from $1 to $50 per new member sign-up based on the lifetime value of each new member and they are determining that value by gathering anywhere from 10 to 40 days worth of data on a new member. How eBay makes this decision based on such little data is simply beyond me. Can you really determine what a new member is going to do for their lifetime with such a small slice of their activity? While they claim in the report that thousands of affiliates are receiving increased compensation because of the new pricing structure, there is certainly a buzz around the net on blogs and in forums, including their own, from affiliates that are receiving less compensation. They might want to read their own affiliate forum to see how many people are ticked about the new ACRU payouts. It is terribly unmotivating for affiliates to expect a certain payout at the end of the month only to have it decrease by a significant amount several days later.
While eBay supposedly benefits from crunching all their data and paying out affiliates based on the quality of their leads, they don’t share that data on how they determine the quality of the leads you send them. There is a report in your EPN interface that allows you to see individual campaign quality as long as you have enough ACRU’s to register in the report, but all my reports say I don’t have enough data determine my quality. Funny, somehow eBay determined the quality of my ACRU’s and it would be nice if they would share that data with affiliates so they can do something about it. Hey eBay, we can’t change what were doing if we don’t know what were doing.
I have to wonder if eBay is really committed to quality as the title of the report suggests or if they are just looking for a way to save money by paying out less to their affiliates.
You can check the eBay blog to get access to the downloadable pdf report.
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