We’re having an informative conversation in the comments section with Ken, a product manager (unconfirmed) at eBay regarding the new eBay AdContext program. More details are surfacing, including what looks like they will be using Commission Junction for this program, as they have been using for their existing affiliate program.

Ken points out:

Also, in response to your question about who will be paying at the end of your post [here], it’s eBay who will be paying. eBay has had an affiliate program for quite a while now and has shared revenue with affiliates who driving users and activity to eBay’s sites around the world; AdContext has the same payout structur as the affiliate program.

We were aware that eBay had an affiliate program and Ken’s comment caught me a bit by surprise why we weren’t already signed up. I mean, we’ve been building, launching and running websites for over 10 years now. It seemed to me we should have been signed up with their program already. Why weren’t we?

And then I visited the URL Ken provided:
http://affiliates.ebay.com/ads/adcontext/

We long ago dismissed eBay’s program as being viable for us because it uses Commission Junction (CJ). CJ is among the worst converting affiliate broker programs [see CJ sucks] that we’ve tried out there. Note: that’s just with our traffic and sites and doesn’t mean they suck for everybody (some swear by them), but they sucked badly for us. We made a significant amount more money by switching away from them to a couple of their competitors. When you make a lot more money switching from a program, you remember those type of things.

If eBay AdContext is going to use CJ then that’s pretty much a dealbreaker for our company. eBay is big enough to do their own affiliate program, why would they be farming this out to CJ? I don’t get it. eBay will (over)pay billions for Skype and yet won’t design, build and implement their own affiliate program?

I don’t expect Ken to be able to explain this one but maybe he can find somebody who can.

This page indicates:

# Earn up to 70% commission on eBay Revenue
# Earn up to $20 commission for new active user referrals

Cutting out all the “up to” spin, we learn:

0-$4,999/month = 40% commission
$300,000/month = 70% commission
1 - 499 referrals = $12/month

The answer to my other question about more specifically “when” AdContext will be launched? “At this time we haven’t announced a launch date. Stay tuned to the eBay Affiliates Program Web site for more information.”

As for what Ken posted at Darren’s site, this comment stuck out:

Darren correctly points out that the 40-70% the publisher receives is not from the winning bid/BIN price but is from the revenue that eBay would take from the transaction. While his percentages seem small (the correct values are 2.6% to 4.55% using his 6.5% take-rate figure) a lot of eBay’s affiliates drive significant monthly revenues using this exact same payout structure. I’m not at liberty to disclose what they are though. But unlike other company’s we tell you up front what percentage of the revenue we are sharing with affiliates.

Firstly, let’s break this down using an average of 3.5%. Auction goes for $100. That’s $3.50 total commission with 40% going to the AdContext affiliate (Unless they generate more than $4,999 per month, which the vast majority of affiliates won’t) or a whopping $1.40 USD.

This is all assuming of course that they are the first eBay AdContext affiliate that refers the winning bidder.

If the item auctions for $1,000, then we’re talking $14.00, $10,000 it’s $140. As I pointed out with reservation earlier, eBay AdContext is going to be best for higher priced auctions. What I remain interested in seeing is what level of tweaking will be allowed to developers for showing these higher priced auctions? Beanie Baby auctions aren’t going to be worth the ad real estate where conversely high end electronics and motor vehicles could be attractive to affiliates.

It’s much different thing paying pennies or even fractions of pennies for clicks vs. paying pennies for completed auctions.

Ken also mentions there will be an API so developers can hook in and get contextual results returned. This should give us some level of tweaking — hopefully with filtering by price. In that case, I can see inserting eBay AdContext ads on higher end auctions primarily but again if that involves CJ … ?

If that level of control will not be allowed I think it’s going to be tough to make any significant money from this program.

My interest in this program has now fallen from 100% interested to 10%.

Update 7:02am PST: Just noticed that Darren reposted Ken’s detailed comment on his blog in a separate post adding his own italicized commentary: “Keep in mind the information is from someone working on it so there is an element of natural bias there - but I think Ken’s done a reasonably good job.”

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