November 07, 2006

Behind the Scenes at eBay's Affiliate Marketing Programs

SUMMARY: Even though eBay is one of the Net's top 5 advertisers, they still invest significantly in growing their affiliate program -- which we guess proves no site can get all the traffic it deserves by itself.

In MarketingSherpa's new exclusive interview, eBay's Senior US Affiliate Manager reveals practical tactics on structuring commissions, best publishers to work with and going global:

"We're one of the largest affiliate programs on the Internet," says Lily Shen, eBay's Senior Manager of Internet Marketing. "We've been in place for five years and done a lot to grow it over the last few."

MarketingSherpa has heard anecdotal evidence from so-called 'super affiiates' that eBay is one of the most respected programs out there. What puts eBay ahead of other merchants? We interviewed Shen to get her practical tips for merchants and affiliate managers:

Recruiting & Managing the Best Affiliates

eBay has five full-time managers focused on helping US affiliates. What do these managers do all day?

o Grow very personal relationships with the top 100 affiliates, such as Earthlink. This includes getting out of the office to touch base in person, especially at trade shows.

o Work hands-on with a continually varying group of targeted affiliates to see if a few changes or inspirational suggestions can help them make the leap to the next level.

o Coordinate with the tech dev team to invent new tools for affiliates as well as keep current feeds completely updated and bug-free.

o Send all affiliates a monthly newsletter.

o Persuade new and old affiliates to target specific categories in whic eBay sees unexplored opportunities. "We may pursue people who already have a Web site in that area or [successful affiliates] who don't but might be interested in building an additional Web site."

Advertising: Limitations & Integration

"We don't have any limitations around how we allow affiliates to promote," notes Shen. Well, sort of. Like most major merchants, the team has placed rules around use of eBay and third-party trademarks for search marketing.

Also unlike many merchants, eBay vigorously enforces CAN-SPAM by requiring all affiliates doing dedicated promotional blasts to send in their lists to be scrubbed against eBay's own house opt-out list. "On average, I'd say the big emailers send about once a month or every other month."

However, what makes eBay great in so many affiliates' minds is the team's dedication to quality ad feeds. As MarketingSherpa has reported in the past, 17.78% of surveyed affiliates said merchants don't update their data feeds often enough.

eBay is one of the few merchants to invest aggressively in continually updated and easy-to-integrate data feeds including:

o Access to the API, so that nearly all eBay information, including prices, could be posted on the affiliate's site. "We're open-minded. We realize people have preferences and might prefer to shop [eBay] on portals of search engines [instead of eBay.] That's fine with us, we'll enable that access," explains Shen.

o Editor's Kit for the API. "You can embed it on your site and it serves up eBay listings with a filter. It works by category, so you can customize it for your site."

o AdContext. Just launched this fall, this tool serves eBay ads based on the content of the site.

Evolving Your Commission Structure

eBay has 203 million registered users in the US … which means the site's initial offer of a commission for each new user isn't as appealing as it might have been years ago.

So, the team have invented a tiered series of commission options. Unlike other merchants, the tiers aren't based mainly on the total number of revenues generated, but rather on the type of conversion activity that affiliate seems to generate the best. This allows the affiliate to optimize offers and content to generate more of that type of user.

Tiers include:

o Newly registered users

o Newly registered users who complete a revenue-generating activity (buying or selling) within a certain time period

o Transactions

Going Global: Practical Tips for Merchants

eBay has affiliate teams strewn across the globe. Currently, Shen is the group coordinator (a revolving title), so we asked for her going-global tips:

o Don't use translation software for your ads or site. Get locals to translate. (Note: we've heard that from plenty of other marketers as well.)

o Encourage top affiliates in each country to consider expanding into other countries. Shen knows one top German affiliate about to launch in the US thanks in part to her team's advice. She also knows of many US-based affiliates who've expanded overseas with eBay's help.

o Adjust commissions -- in newer markets, eBay pushes for more registered users. In more mature markets, eBay pushes affiliates to bring in the transactions.

o Centralization vs decentralization -- eBay has decided in favor of decentralizing country teams and letting each country run its own local affiliate program. That said, as current team leader, Shen organizes monthly teleconferences and semiannual in-person group meetings with everyone attending.

So, her approach is decentralization with an extra-large dollop of networking and intramural communication.

"Our biggest affiliate marketing mistake," Shen says, "was not to recognize that global opportunity even sooner for some affiliates because we had operated stand-alone programs in each country." Suffice to say, that's no longer a problem.

What's next?

Affiliates with offline media (see link to one below), mobile marketing (duh) and cool apps to take advantage of Web 2.0 (see link to one below.) "There's no shortage of opportunities …"

Useful links related to this article:

Commission Junction - the affiliate program eBay uses

Onfire - eBay authorized agency offering real-world eBay signage to realtors in the San Francisco area

Cooqy - creator of widgets for eBay shoppers, including a MySpace widget


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