Last week the eBay Partner Network team gathered at the W Hotel in San Francisco to attend the Affiliate Awards and cheer on some of the best and brightest companies in our industry. We had been nominated for "Best Merchant Innovation" and were excited and honored when we won!
The innovation that helped us win this award is centered around Quality Click Pricing (QCP). Many of you are aware of what QCP is and eBay's rationale for implementing it. For those that may be new to ePN, we thought you might appreciate little backstory.
As we know, affiliate programs are designed to pay affiliates for leads and sales, and payouts reflect an assumption that all leads and sales are valued the same. Little attention has historically been paid to the quality of a lead and its lifetime value to the merchant. However, when eBay brought its affiliate program in house, the company gained access to detailed performance information and, along with it, important insight into the value affiliates were actually delivering to eBay.
When the eBay Partner Network team analyzed the data, it became clear that the existing Cost-Per-Action (CPA) payment structure was not optimal for either eBay or many of its best affiliates. As is the case with most other CPA payment models, eBay rewarded affiliates for the quantity, rather than the quality, of their traffic. The tiered payout structure meant larger affiliates earned more per sale or lead than smaller affiliates, despite the fact that affiliates with small niche content sites often drove the highest quality traffic. One of the reasons for this is that people are typically more engaged with and interested in a particular product when they are on a site dedicated to that product, as opposed to a site that reviews or discusses hundreds or thousands of different products.
In addition, eBay found that the amount paid to an affiliate for each new user generated was not necessarily aligned with the long-term value of that user. In many cases, the company was overpaying affiliates who were bringing in low quality new users and underpaying affiliates who were bringing highly engaged eBay shoppers.
Understanding these issues, the eBay Partner Network team saw the need to radically change its compensation structure in order to both accurately reflect the true value affiliates generated for the site, and to reward affiliates fairly for valuable traffic. The result was Quality Click Pricing.
We're excited and honored to be recognized for our innovation in the affiliate marketing space, and we look forward to another year of growth and prosperity for all of our valued partners.