Improving the quality of your Affiliate Programme - Katrina Bischoff and Chris Worthy


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  • KATRIN & CHRIS: My name is Katrin Bischofff and I run eBay’s European Publisher Development since I joined the eBay Affiliates Team at the beginning of September this year. As you probably can hear I’m German – so there might be some German English in my PPT . For the UK market we work very closely with ROEYE…  Then Chris… we will split up the PPT like that: Today we are going to talk you through some of the things eBay has learned over the last few years on two areas: As an advertiser, how you can improve the quality of the traffic in your affiliate programme And as a publisher, how you can improve the quality of the traffic you send to advertisers and thereby increase your earnings.
  • KATRINI don’t know how much U know about ePN. Background: we launched ePN in April 2008 to replace eBay’s programmes on 3rd party affiliate platforms. We currently run affiliate programmesin 13 different countries on ePN, and within Europe have more than 50k affiliates operating across 27 different countries. Our affiliates range across a variety of business models, including portals, content sites, blogs, OCS, deals and Loyalty. In automn last year, we announced Quality Click Pricing, a new CPC-based payment model which rewards publishers according to the quality of the traffic they send to eBay, which we will talk about a little bit later in the presentation.
  • KATRIN4 things on the agenda for today’s presentation: Some of the key questions we see for Affiliate Marketing in 2010 and the future How we have attempted to tackle these questions and what we’ve learned as a result How our publishers can improve the quality of their traffic – Chris will guide us through that part And how advertisers can improve the quality of their programmes
  • KATRINIn our opinion, there are a number of fundamental questions all affiliate programme managers should be asking themselves about the traffic they are generating for their business. Three of the most important are as follows:Where is my Affiliate traffic coming from? It always amazes me how different norms are around affiliates than the rest of the marketing industry. I.e., it’s hard to imagine buying TV advertising without having any idea where your TV ads would be shown – you’d know exactly which spots on which channels at which times. In affiliate marketing, many advertisers have no idea where their traffic is coming from – as long as the numbers look good, they don’t care. The trackable nature of affiliate marketing has made advertisers blasé about due diligence on their traffic sources.What is the incremental value affiliates are adding to my business? Again, tracking is part of the problem here. As with Online Marketing in general, the common misconception is that any purchase which correlates to an affiliate tracking tag must have taken place because of that affiliate promoting your brand. In our experience, this is not the case. The third question which advertisers need to ask themselves is how can I align my publishers’ and networks’ incentives with my incentives. Too often, we find that publishers are being compensated for events which do not fit with the real objectives of the advertisers they are promoting. On the network side, there is a clear misalignment of incentives in the case of Network Quality – networks earn a % of commissions paid out to publishers, and are therefore not incentivised to catch fraudulent or non-incremental traffic and stop advertisers from paying for it.
  • KATRINSo, how have we attempted to tackle these questions, and what results have we seen from doing so?
  • KATRINOne of the first questions we wanted to tackle when we launched eBay Partner Network was where our traffic was coming from. We were uncomfortable with the lack of visibility into traffic sources that we got when we were on third party networks and felt that we could control those processes better if we took them under our own wing. We’ve since made 4 major improvements in this area:Improved our front door processes to make sure we’re asking the right questions and capturing relevant data when publishers apply to ePN. We can then use this data to select which publishers we want to allow into ePNand which are not suitable. This in turn significantly reduces the churn that is needed to process network quality issues further down the line.Improved how well our Ts and Cs were defined in order to give publishers a much better idea of what is and is not allowed on ePN. Giving publishers this information up front has helped to ensure that publishers do not waste time creating apps and integrations which will be disapproved, and has also sped up the resolution of NQ cases that do arise.Invested in fraud detection both internally and working with external vendors in order to create a suite of tools to identify breaches of Ts & Cs, capture evidence of them and use this to make decisions around what to do with the publishers identified. Worked with our publishers to ensure they are transparent with regard to the sources of their traffic – for example, registering their domains with us and opening their referring URLs so that we can see where our ads are appearing and where they’re not.
  • KATRINIn order to ensure we were aligning our publishers incentives with ours, we launched Quality Click Pricing in September 2009. This is a variable, CPC-based payout method, where the CPC is calculated according to the quality of the traffic publishers send to us. There are 3 basic pillars we think about with Quality Click Pricing when determining how much a publisher’s traffic is worth to us: Which User Events that we care about (i.e. which have a value to eBay) has that publisher driven. These include things like new customer acquisition and purchases of items, which we had previously paid out for under the old CPA or in the US under theRevShare system. However, by going to a variable CPC model, we were also able to include a number of other user events which have value to us while keeping the payment structure simple for publishers. These include things such as revenue generated from advertising placements on eBay; revenue generated by transactions which complete with PayPal etc. The 2nd thing we look at is for each of these user events, what are they worth? This is actually pretty simple for us to calculate, and is something all advertisers have to do when they work out what CPA/ CPS they are willing to pay out. We take this a step further on the customer acquisition side by working out the value of customers which each individual affiliate has generated for us and then paying that publisher accordingly, rather than relying on aggregate values across the affiliate channel. Finally, and most uniquely, we look at how incremental those user events are – would the events have taken place without the affiliate promoting eBay. We see a lot of differences on the incrementality of purchases attributed to individual affiliates – some publishers drive a lot of transactions from customers who would not otherwise have bought on eBay, while others simply manage to place their tracking cookie in the flow of a transaction which in all likelihood would have taken place regardless of their activity. This model has benefited many publishers significantly – indeed, 27% of our best quality publishers have more than doubled their EPC since the launch of Quality Click Pricing!
  • KATRINAligning your incentives as an advertiser with those of your network can be difficult. We took the easy route here – we became both the network and the advertiser, so that there was no conflict of interest when it came booting out fraudulent affiliates!However, building an affiliate network is not an easy undertaking, nor is it cheap, and is therefore an unfeasible investment for the majority of advertisers. Thankfully, there are a number of things you can do to help aligning your network’s incentives with your own without replicating our approach: Firstly, make your goals clear to the network. The more they understand exactly what it is you are looking to achieve with your programme, the easier it will be for them to ensure that the publishers on your programme are promoting your brand in the way you want them to. You should also consider whether the override pricing model, where networks earn a % of commissions that are paid to publishers, is the right approach for your business. On the one hand sied this has the advantage of rewarding networks who deliver growth for your programme. On the other hand seide, it does give networks an incentive to let fraudulent affiliates continue on their platform. In certain situations, it may be better to pay out a flat rate or to include penalties for networks if fraudulent publishers are on your programme for greater than a certain period of time. You should also understand what your network does with regard to NQ – get them to take you through exactly how applications are vetted, what visibility they can give you into publisher traffic source etc. And if their answers are not satisfactory, push them to deliver better service in this area. Finally, be aware that the potential for conflict of interest exists, and therefore that the person most incentivised to get rid of fraudulent publishers is you. As a result, take an active interest in controlling the NQ process – vet applications to your own programme, look at referring URL reports and if something looks suspicious, investigate it yourself!
  • KATRINSo what results have we seen since the launch of QCP? When we look at our publisher base as a whole, all of this optimisation has brought great improvements across all of our key metrics. This chart shows the average value of new users acquired through ePN in the 3 months after acquisition. Unfortunately we can’t share the actual values of these users so we’ve indexed them to Aug 2009, the month before QCP launched.The two red lines show the average value for the periods before and after launch. As you can see, the average value has increased by 17% under Quality Click Pricing – our affiliates are now driving more valuable customers than ever before.
  • KATRINThis chart shows the average EPC for our publishers since the start of 2009. Again we’ve indexed these numbers against Aug 2009, the month before QCP launched.Here, the results have been even more marked, with the average EPC increasing by 35% under Quality Click Pricing. Our publishers driving ever more valuable traffic to the eBay site, and they are earning significantly more as a result!
  • As we’ve seen, many ofour publishers have benefited from increased earnings since the launch of Quality Click Pricing. How have they done that? And if you’re a publisher, how can you optimise the traffic you send to advertisers in order to increase your earnings as an affiliate? CHRIS will guide you through that…
  • CHRISOne of the questions publishers ask us most often is how they can improve the quality of the traffic they send to us. While there are a few things which are specific to eBay, actually the vast majority of things we tell our publishers are applicable to any affiliate on any ecommerce programme.The fundamental thing to keep in mind when figuring out how to optimise your traffic is to Put The Shopper First. What we mean by this is to put yourself in the mindset of a customer who is visiting your website. How can you add value to their shopping experience in order to make them more likely to purchase something than they would have been without visiting your site?Within this, we think of 4 main ways in which publishers can enhance the shopping experience for our users: Offer a Service Create a Quality Site Be Relevant to what users are interested in Be Selective in what products and information you shareWe’ll talk you through each of these in a little more detail with some examples
  • CHRISFirst up,Offer a Service to your users. Think about what it is that a user wants from visiting your website and provide that service to your users. This could take a number of forms, including: Good quality content which is additive to the shopping experience – for example, what features a specific product has Expert or user reviews of products to help customers make their decision as to whether this is the right product for them Price comparison functionality, so that users can find the best deal for the product they’re looking for Buyer tools so that customers can easily find items they have previously looked at, or to offer the functionality mentioned above.Here you can see an example of one publisher, Trusted Reviews, who do a great job of many of these features. As you can see, the site offers detailed information about the specific products features, as well as expert reviews on the products, comparisons with similar products, and price comparison functionality from across a range of different sites.
  • CHRISSecondly, publishers should ensure that their site is of a high quality in terms of look and feel. One of my favourite affiliate websites is Twenga, a shopping comparison publisher who have invested significantly in making their site appealing. Although this is necessarily a subjective matter, there are certain aspects that any good quality site should have, including: Appealing visuals – it should be clear, uncluttered and make customers feel welcomed Easy navigation - clear, logical layout which lets users understand what they are looking at, with the most relevant products for the particular page a user is on highlighted, and an obvious way to move about the site Good quality content – again, the more of this you can provide and keep up to date, the more likely customers are to keep coming back to your site.
  • CHRISThirdly, publishers should try to ensure that the information and links they are providing are relevant at all stages of a customer’s journey throughout their website. A publisher who does a great job of this is TestFreaks, who are another product review site. I keep coming back to content, but if you don’t have good quality, relevant content on your site that users will keep wanting to come back for, your business model is probably not sustainable in the long term. The key here is to making sure that the content you are providing is as relevant as possible for the page a visitor is on – for example, on the homepage for the Sony PSP Go, the initial information TestFreaks provides is highly relevant – an overall rating for the product, prices, images, videos and more. You should also make sure that you’re highlighting products which are relevant for user context – for example, if you have a site specialising in expert reviews of a product and you are slating it, it may be worth giving merchandising space to alternative products on this page rather than devoting it all to the product you do not think is worth buying! Finally, when sending a user from your site to a merchant, make sure you are sending users through to the right page on their site – in the examples above, deep linking to the specific product or item shown. Not only will doing so improve your conversion rates, it will also encourage users to come back to your site more often as they know they will be sent to the most relevant page on an advertisers site when they visit you.
  • CHRISFinally, publishers should make sure that they select the most attractive, appropriate products and information to display to users. For example, look out for special offers/ deals, highlight products with particularly strong sales histories or good reviews, and which offer value added services such as free shipping. All of these things help to make the offers you are presenting to users more attractive, and should therefore bring customers back time and time again to check out what new products you are highlighting to them.
  • That’s a lot of information for publishers on how they can increase the quality of the traffic they send to advertisers. Obviously communicating all of these hints and tips can help advertisers to increase the quality of the traffic coming to their programme. But what else can they do? Here are a few of our top tips for programme managers to leverage affiliates as effectively as possible.
  • KATRINTo be successful, you need to have all levers at your disposal operating in harmony. The first of these is Network Quality.Start by thinking about your Business Model policy - Which business models should you allow? Different business models work for different types of merchants, so there are no hard and fast rules. However, you should put thought into your policies and ensure that the types of affiliates you permit fit with your brand’s strategy and that they work with your other internet marketing channels. For example:Direct paid search – do you know if it is increasing your own internal search costs or is it widening your coverage?Ad Networks – do you know where all your ads are appearing and if it fits with your brand strategy? If you are using them for volume, are you aware of risks to brand perception?Voucher code sites – are people visiting your site, deciding what to buy, then going to the voucher code site to buy? Once you have decided which business models you want, focus on ensuring you have the right filters in place at the Front Door – how do you prevent the bad guys getting into your network in the first place, whilst ensuring the best quality affiliates can enter? When you expire an affiliate for committing fraud, how do you prevent them from re-entering the network under a different name and IP address? Time spent here saves you time and money in the futureLegal – Having watertight T&Cs and the support of a legal team who understand the affiliate industry is essential to the success of your programme. This is where you tell your affiliates what is and is not allowed on your programme, so make it clear and accurate! Then when you find an affiliate breaking these T&Cs, you need to collect and store sufficient evidence of the offence. Finally on NQ, think about the Transparency of your programme - Do you know exactly who your affiliates are and where their traffic is coming from? Are they who they say they are? Do the affiliates own/manage the site they register with – eBay requires all publishers to verify their domains by adding sniplet of code to their site. Does their volume of clicks fit with the size and profile of their site, e.g. Alexa rankings, Google page rank, check they have a visible integration.Lack of visibility of referring traffic can often be an indicator of fraudulent activity – so make sure that you are working with publishers to unmask these!
  • KATRINThe second lever to focus on is Tools: Start by understanding which publishers you want to promote/ drive more traffic from, this will determine your tools strategy – how do they integrate other merchants, what formats do they work with, what limitations do they have? – make it easy on your publishers! When we speak to publishers, the most common reason we are told they can’t integrate eBay (or other merchants for that matter) is that the tools available don’t fit with how they are used to receiving data and that they don’t have the resources to create complex integrations! I’ll be honest and say that we are not where we want to be with Tools – and fixing that in the near future is one of our top priorities. Remember too to think about consumers when designing your tools – how your tools are designed determines how consumers will view your site – so make sure they are in line with your brand image, and that customers will like the look of the outputs from these tools!
  • KATRINAccount Management is also a key lever for any affiliate programme manager to concentrate on. Ultimately, affiliates is all about partnerships, so take the time to get to know your publishers and understand their businesses and where you can support them. Too often, account management in affiliates is little more than glorified customer support, answering questions and solving issues. Instead, work with your publishers proactively, this is a great chance to educate and encourage your publishers to optimise their promotion of your brandListen to your best publishers – we ran a beta for QCP, made a number of enhancements based on this. Since then we have continually listened to publisher feedback in order to make the system as positive for our publishers as possible. Continue to make changes to all aspects of our programme according to great ideas you get from your publishers every day!
  • KATRINEducating publishers on how they can be more effective is not always the done thing within affiliates – but it should be!Affiliate programme blogs are no different from any other medium – if you want people to keep visiting them, give them a reason to keep coming back. This means regularly updated, value-added content (value added for the publisher, not just the merchant/ network!). Too often, blogs are used simply to communicate short-term promotions, rather than focusing on building up publishers’ knowledge of how they can successfully promote your brand on an ongoing basis. Blogs, newsletters and account management are all great vehicles to improve your publishers’ knowledge – which in turn benefits your business! From a Reporting perspective, let publishers know which metrics are and are not important to you – and which parts of their traffic are working and which aren’t according to these metrics. The more information you can give your publishers on what happens when their users hit your site, the better they will be able to optimise the various levers available to them -> how they are integrating your site, which landing page to use etc.‘Assumption is the mother of all screw-ups’ – good reporting enables you and your publishers to reduce the role of assumption when optimising – so it is a key contributor to your affiliate programme’s success.
  • KATRINFinally, make sure that your pricing model is in line with what you wish to achieve through your affiliate programme. The principles we have applied with Quality Click Pricing are applicable to any advertiser – figure out what events matter to you, make sure you understand the value of those events, identify which ones are being driven by publishers rather than just attributed to them and you will be on a good path to having your publishers’ incentives aligned with your own. By rewarding your best publishers and giving your under-performing publishers a financial incentive to improve, you should benefit from the same significant improvements to your affiliate programme that we have since launching eBay Partner Network.
  • KATRIN & CHRISThank you for taking the time to listen to us today – if you have any questions, please go ahead!
  • Improving the quality of your Affiliate Programme - Katrina Bischoff and Chris Worthy

    1. 1. Improving the Quality of your Programme’s Traffic – eBay’s Insights<br />eBay Partner Network<br />13th October 2010<br />
    2. 2. Quick eBay Partner Network background<br /><ul><li>>50k EU affiliates in 27 countries
    3. 3. Business models include portals, content sites, blogs, shopping comparison, deals and loyalty sites
    4. 4. eBay Partner Network launched April 2008, replacing eBay affiliate programmes on 3rd party networks
    5. 5. Affiliates promote eBay in 13 countries worldwide
    6. 6. Last year announced Quality Click Pricing, a new CPC payment model rewarding publishers for quality traffic</li></li></ul><li><ul><li>Key questions for advertisers in affiliate marketing
    7. 7. Our attempts to tackle these questions – and our results
    8. 8. How publishers can improve the quality of their traffic
    9. 9. How advertisers can increase the quality of their own programme</li></ul>Agenda<br />
    10. 10. Key questions for advertisers<br />“Where is my affiliate programme’s traffic coming from?”<br />“What is the incremental value affiliates are adding to my business?”<br />“How can I align the incentives of my network and publishers with my own?”<br />
    11. 11. <ul><li>Key questions for advertisers in affiliate marketing
    12. 12. Our attempts to tackle these questions – and our results
    13. 13. How publishers can improve the quality of their traffic
    14. 14. How advertisers can increase the quality of their own programme</li></ul>Agenda<br />
    15. 15. How we have attempted to tackle these questions<br />“Where is my affiliate programme’s traffic coming from?”<br />Enforced transparency<br />Improved front-door security<br />Better defined Ts and Cs<br />Investment in fraud detection<br />Launching an in-house platform enabled greater visibility and control over traffic sources<br />
    16. 16. How we have attempted to tackle these questions<br />“What is the incremental value affiliates are adding to my business?”<br />“How can I align my publishers’ incentives with my own?”<br /><ul><li>Launched Quality Click Pricing, a variable CPC payout model</li></ul>User events<br />Incrementality<br />Value<br /><ul><li>What is each event worth?
    17. 17. Acquisition
    18. 18. Purchases
    19. 19. Payment method
    20. 20. Ad Revenue
    21. 21. ...
    22. 22. Would event have taken place without ad interaction?</li></ul>27% of publishers have more than doubled their EPC under Quality Click Pricing!<br />
    23. 23. How we have attempted to tackle these questions<br />“How can I align my network’s incentives with my own?”<br /><ul><li>Make your goals clear to them
    24. 24. Look at alternatives to override model
    25. 25. Press your network on their NQ efforts</li></ul>OR<br />
    26. 26. Key metrics improving since QCP launch<br />17% increase in Active User Value since launch<br />
    27. 27. Key metrics improving since QCP launch<br />35% increase in Earnings Per Click since launch<br />
    28. 28. <ul><li>Key questions for advertisers in affiliate marketing
    29. 29. Our attempts to tackle these questions – and our results
    30. 30. How publishers can improve the quality of their traffic
    31. 31. How advertisers can increase the quality of their own programme</li></ul>Agenda<br />
    32. 32. How Publishers can improve the quality of their traffic<br />Put the Shopper first!<br /> Offer a Service<br />Quality Site<br /> Relevance<br /> Be Selective<br />
    33. 33. How Publishers can improve the quality of their traffic<br />Put the Shopper first!<br /> Offer a Service<br />What does the user want?<br /><ul><li>Content
    34. 34. Reviews
    35. 35. Price Comparison
    36. 36. Buyer tool</li></li></ul><li>How Publishers can improve the quality of their traffic<br />Put the Shopper first!<br /> Offer a Service<br />Quality Site<br />How does my site look?<br /><ul><li>Well designed site
    37. 37. Easy Navigation
    38. 38. Good content</li></li></ul><li>How Publishers can improve the quality of their traffic<br />Put the Shopper first!<br /> Offer a Service<br />Relevance<br />End to end relevance<br /><ul><li>Content of site
    39. 39. Relevant products
    40. 40. Best landing page</li></ul>Quality Site<br />
    41. 41. How Publishers can improve the quality of their traffic<br />Put the Shopper first!<br /> Offer a Service<br />Relevance<br />Be Selective<br />Quality Site<br />Show best products<br /><ul><li>Special offers
    42. 42. Popular products
    43. 43. Free shipping</li></li></ul><li><ul><li>Key questions for advertisers in affiliate marketing
    44. 44. Our attempts to tackle these questions – and our results
    45. 45. How publishers can improve the quality of their traffic
    46. 46. How advertisers can increase the quality of their own programme</li></ul>Agenda<br />
    47. 47. How Advertisers can increase programme quality<br />Network Quality<br /><ul><li>Carefully select business models
    48. 48. Pay attention at the front door
    49. 49. Ensure T&Cs are clear and watertight
    50. 50. Transparency into traffic sources</li></li></ul><li>How Advertisers can increase programme quality<br />Network Quality<br />Tools<br /><ul><li>Understand your publishers’ websites
    51. 51. Make integrations as easy as possible
    52. 52. Ensure tools reflect your brand image</li></li></ul><li>How Advertisers can increase programme quality<br />Account Management<br />Network Quality<br />Tools<br /><ul><li>Direct communication with publishers
    53. 53. Proactive and reactive
    54. 54. Don’t just talk – listen!</li></li></ul><li>How Advertisers can increase programme quality<br />Account Management<br />Network Quality<br />Tools<br /><ul><li>Blogs are for life, not just for sales!
    55. 55. Give publishers tips for success
    56. 56. Clear, relevant data</li></ul>Information<br />
    57. 57. How Advertisers can increase programme quality<br />Account Management<br />Network Quality<br />Tools<br /><ul><li>True value of publisher traffic
    58. 58. Reward your best publishers!</li></ul>Information<br />Pricing<br />
    59. 59. Thank you for listening!<br />Questions?<br />