Setting Quality Standard in Affiliate Marketing

Setting Quality Standards in Affiliate Marketing William Martin-Gill, Director, eBay US Affiliate Marketing Chris Howard, Senior Manager, eBay EU Affiliate Marketing

Quick eBay Partner Network background ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Why quality standards are important ,[object Object],[object Object],[object Object],[object Object]

Quality is becoming a focus for advertisers, networks and publishers “ during the 3 months ended Mar 31, 2008, we terminated relationships with certain Google Network members who did not comply with our AdSense policies … these steps include[d] … terminating Google network members whose web sites do not meet our quality requirements” Source: Google 1Q 08 10-Q “ We believe Yahoo!’s affiliate business is likely to deliver relatively flat Y/Y top-line growth over the near term as Yahoo continues cleansing its affiliates by focusing on quality…” Source: Lehman Brothers, Anmuth’s Internet Inside, early 2008

Quality is becoming a focus for advertisers, networks and publishers Advertisers cited inventory quality as the top ad network differentiator in 2008 Source: ThinkEquity Partners, Collective Media 2008 Ad Network Study 52% of pay per lead merchants cited quality-related issues as their biggest affiliate marketing challenges. Source: Shawn Collins, AffStat 2008 Report

Quality is core to eBay Partner Network Network Quality High value traffic to advertisers Rich commissions to publishers

What is quality? Legitimate traffic Incrementality of sales Lifetime value of customers Was the sale or the new user lead legitimate and within our T&Cs or was it fraudulently generated? Would this sale have happened anyway without the efforts of the affiliate? Are the new users as or more valuable than what the merchant is paying to acquire them?

We fight multiple NQ battles ,[object Object],[object Object],[object Object],[object Object]

As a merchant: Think about more aggressively attacking NQ ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Managing NQ effectively requires dedicated resources

As an affiliate: Know the merchant T&Cs and protect yourself ,[object Object],[object Object],[object Object],Abide by the advertiser’s terms and conditions Protect yourself ,[object Object],[object Object],[object Object]

What is quality? Legitimate traffic Incrementality of sales Lifetime value of customers Was the sale or the new user lead legitimate and within our T&C’s or was it fraudulently generated? Would this sale have happened anyway without the efforts of the affiliate? Are the new users as or more valuable than what the merchant is paying to acquire them?

Not all sales are created equal Most programmes measure sales… … When they should be measuring incremental sales “ Would the sale have happened without the effort of the affiliate?” Why? ,[object Object],[object Object],[object Object],[object Object]

How do we think about quality of sales? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Small affiliates can be your best affiliates Yet how many programmes reward small affiliates with higher-than-average payouts? Revenue per click for different sizes of affiliates in eBay Partner Network (Data for October 2008)

As an advertiser: help your affiliates drive incremental traffic ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Opportunities for advertisers

As an affiliate: Build high-quality sites and optimize them ,[object Object],[object Object],[object Object],[object Object],[object Object],Most of all: test, test, test Opportunities for affiliates

Not all leads are created equal Most programmes pay flat rate for leads… … When they should be rewarding lifetime value of those leads Why? ,[object Object],[object Object],[object Object]

Average value of leads can vary significantly by affiliate Value Index Value of Active Confirmed Registered Users Class of Mar 2008 Not compensating the best affiliates for traffic they bring Rank-ordered affiliates Programme Average Large numbers of affiliates driving below-average ACRUs

Quantity and quality not always correlated Value of Active Confirmed Registered Users Recent class of users Size (Number of ACRUs per affiliate) Value Index Need to supplement volume-based tiers with factors to reward for quality

How value-based pricing might work Case Study: eBay Partner Network, US ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],$25 $35 $50 $1 Oct Nov Dec Jan ,[object Object],[object Object],[object Object]

How this works, in practice ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

As an advertiser : invest in better technology ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Opportunities for advertisers

As an affiliate : learn to target effectively ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Opportunities for affiliates Most of all: test, test, test

Metrics and pricing are no silver bullet ,[object Object],[object Object],[object Object],Affiliates is a relationship-oriented channel Need to continue to invest more than money in your affiliates ,[object Object],[object Object],[object Object]

Why are we sharing all the insights we’ve learned in the past year? ,[object Object],[object Object],[object Object],[object Object],[object Object],Together we can help the affiliate channel reach its full potential!

If you’re interested in learning more… White paper on quality in SEMJ.org… ,[object Object],[object Object],[object Object],[object Object],[object Object],… or, come and talk to us

Questions and Answers William Martin-Gill, Director, eBay US Affiliate Marketing Chris Howard, Senior Manager, eBay EU Affiliate Marketing

Setting Quality Standard in Affiliate Marketing

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Setting Quality Standard in Affiliate Marketing