Paying Affiliates by the Click. Here’s Why. — eBay Starts
eBay is no longer paying per sale. But the real reason isn’t so obvious.
For years, online retailer and auction service eBay offered a traditional affiliate program. It paid affiliates for sending fresh registrations and sales to eBay, similar to how most online retailers pay a commission for sales.
But as many firms try to move from PPC to a pay-for-performance model, eBay is going the opposite direction.
Well, in name only. It’s still pay-for-performance, but now a magic black box will figure out the value of your traffic and pay you accordingly.
eBay can get away with this since it has so many affiliates and many firm’s business models rely on the eBay affiliate program. No fresh firm could come to you and say “send me your traffic, and I’ll tell you later how much I’ll pay for it.”
By switching to a so-called PPC model, eBay gets more than the benefit of hiding data from affiliates. Although its stated goal is to reward affiliates for the true quality of their traffic, I think another is the state tax issue.
Facing budget crunches, state governments are trying to cram down sales taxes on internet retailers. eBay’s home state of California almost passed a law that would require internet retailers outside of California to collect sales tax if they had any affiliates in California. Governor Schwarzenegger vetoed the bill. These laws don’t accomplish their goal of raising revenue for states. In fact, it ends up lowering it.
Technically, paying affiliates by the click means they are no longer “sales people” for the firm, which could help avoid state sales tax traps. We may see more more firms move to this model over time.
Look for firms like Austin, TX-based Click Forensics, a click fraud monitoring firm, to reap the rewards.
