Communication, collaboration, transparency, and trust — those are some of the keys to successful partnerships at eBay, according to Partner Network UK Lead Richard Lane. We interviewed Rich as part of Impact Growth virtual edition earlier this summer to find out how he and his team measure success, what they’ve observed during the pandemic, and how partnership automation fits into their approach.
Actively testing, trialing, and seeking out more strategic ways of working are ongoing activities for the eBay partnership team, which continually pursues greater efficiency from its fixed partner budgets. Given the diversity of its partner network and product offering, measuring that efficiency isn’t always simple.
eBay’s KPIs include transparent metrics it shares with partners and sophisticated algorithms it uses internally. The variables are many; different partners and partner verticals bring in different kinds of users, and each user has a different value to the business based on what products and categories they buy, how often, and when. Variables from the entire customer journey are factored into eBay’s assessment of the efficiency and net value of each transaction and thus its valuation of and commissions to each partner.
During the pandemic, category performance was vital
Lane reports that eBay saw some interesting buying trends during the shutdown that underscored the team’s need to understand the category strengths of its partners. During any normal year, there are peaks and troughs in category demand based on seasonal needs. But during the shutdown, peaks and troughs occurred on a condensed timeline, with demand soaring and falling over the course of a few days or a week.
First it was fitness gear, then loungewear, then garden furniture as quarantined consumers fell into new habits. As the shutdown wore on into the summer, hair dye and hair clippers became the hot items. With Impact Partnership Cloud, eBay could assess which partners were performing in the categories of the moment—information that isn’t always clear even to partners themselves. Lane notes that that data will be valuable going forward as eBay anticipates future shifts in demand.
Watch the interview: Diversify and conquer: How eBay harnesses the strength of partnerships to learn more about how eBay relies on Impact Partnership Cloud for insight and optimization, or read the full transcript below. (You can also discover more about eBay and how powerful partnerships are in their strategy in this recent webinar chat.)
Or if you’d prefer to read what eBay had to say, here’s a transcript of the video:
Florian Gramshammer:
Hello, and welcome to this Impact webinar. My name is Florian Gramshammer. I’m the managing director for EMEA at Impact, and I’m really delighted to welcome Rich Lane from the eBay partner network. So that’s why we’re here now today, Rich is an industry expert in the UK and across Europe. And, I’m really looking forward to talking to him today about how eBay approaches partnerships. Rich, you’ve got a lot of experience, advertiser, network, agency, and now at eBay, maybe we’ll start with talk, telling us a little bit about your role before we jump into the question.
Rich Lane:
Yeah, of course. Cheers. Like, so my role is, is the, essentially the UK lead of the eBay partner network. So the eBay partner network is a global network, supporting the North America, European and Australia regions with, with specific regions within those. So we’ve got leads, that I worked alongside in Germany and France, in the U S and Australia. And I look after the UK specific part, and working alongside, Acceleration Partners. So manage the day to day the strategic, and kind of long term activities that we run from the UK for, for EPN.
Florian Gramshammer:
How does eBay approach partnerships, and within that global organization?
Rich Lane:
EPN sits within, our kind of global marketing operation. So, that kind of overlaps a little bit with our local marketing teams. And so we, while sitting with the local teams, we sit away from them at the same time. So any partnerships that we have, they may be a local partnership, but also they might be, managing from a wider multi-region aspects as well. In terms of the specific approaches, it’s, I’d argue it’s, it’s the basis of any relationship, really, and it’s very much about the communication, the collaboration, transparency, and trust at the end of the day. And the way we work is, you know, it’s constantly testing and trialing new things and working out smarter and more strategic ways of working. And we want our partners to be part of that journey. And so behind the scenes, there’s always various different conversations, negotiations testing, going on, and to ensure that we’re making EPN as strong and as efficient as we can.
Florian Gramshammer:
When you, when you look at those tests and when you’re driving forward the program, what are some of the key metrics that you’re looking to achieve?
Rich Lane:
There’s an array of metrics that we look at and work with our partners on. Some of them are very transparent and visible to the partners and some of them, unfortunately, are not so transparent because they’re very much behind the scenes and by different kinds of algorithms worked out by smarter people than myself. And so, we, the bottom line is very much as you’d expect volumes and revenues, but within that, it’s very much the efficiency of those transactions that we run with. And so essentially different types of partners have different types of users and, and different users are of different value, I guess, to the business in terms of how much they spend, how often they buy, what products they’re buying or categories of buying, when they’re buying them. And so all this kind of gets mixed up into a kind of a process and, we’re then able to work out the value of the transactions from, for every single partner.
Rich Lane:
And that gives us a benchmark with which to measure, the, the value of the different partners in the different categories and verticals of partners. And essentially you said when we’re referring to efficiency, that’s what we’re talking about.
Florian Gramshammer:
So when you’re, when you’re thinking about metrics, and as you explained, not every Dollar or Pound or Euro of revenue is created equal to the next Dollar or Pound or Euros of revenue. It becomes really important to understand the efficiency of how that revenue is generated. Explain to us a little bit more what that efficiency means to you without necessarily giving away the secret sauce behind.
Rich Lane:
So every single purchase that comes through to eBay is measured on the journey that did that, that path, that user is made.And as part of EPN, that user has come via different, UK partners, and the, the perception, the common perception is that certain partners, it will be more incremental, more, more valuable in the long term than, than other partners. And so it’s essentially looking at those different journeys, but in a measure on the, the, the value of that journey, um, and therefore the value of that, that user, and working out, okay, so the transaction is X amount of that X amount. How incremental that was that journey. And therefore how incremental was that affiliate, that partner in that journey, and by essentially adding all that together and quite a few other different bits of the algorithm, and then it gives us a value and incremental value overall.
Florian Gramshammer:
So the partner mix becomes really important there because you have different partners generating different values of different user audiences. What’s your strategy around new pots and the recruitment then how’d you go about that?
Rich Lane:
That’s, that’s a really, kind of on, on topic at the moment with, with EPN, with this, you know, big focus for us to keep driving the number of partners that we’ve got to keep increasing the diversity. So we’re not relying just on, let’s say that the usual suspects, we have to look at, we have to look at essentially, we’ve only got a finite amount of resources that we can have. And we need to look at what will compliment the partner mix that we’ve got, and to help the business move forward. And so we would then look at the different categories where we need to focus on and think, right, we need to, we need to add more to that mix to help that category or that product base. And so we would spend time in looking at specific categories and we would then be reaching out via different platforms, different recruitment tools, services, and, and trying to add on purpose, add to those mixes that we feel aren’t as strong as they could be.
Florian Gramshammer:
Obviously the beginning of this year has been pretty difficult for a lot of businesses with the ongoing COVID pandemic still prevalent in many regions. How has that affected your strategy and what have you changed?
Rich Lane:
As we touched on earlier on, that has very much kind of changed a lot of things on how we work, who we work with, how we work with those. And it’s been a challenging learning process. I’m sure it has been for, for everyone. What I find really interesting is that when normally a trend, a trend or a season, might last, maybe you could lose weeks maybe a month or two, and, and you can see very clear peaks and troughs of different categories at different times of the year, as a, as a result of that with, with the last three, what has it been three, three and a half months. There’s been very kind of definite, or definitive, peaks and troughs, but on a, almost a micro scale. So we’ve found that there’s been trends of specific products that have lasted a couple of days, maybe a week.
Rich Lane:
And so at the start of, of when all this, the, the, the kind of lockdown kicked off in the UK, for example, the, I think Italian and Spanish, they had already been in lockdown for two or three weeks. So it was seeing their trends and knowing what was to come. And so we worked because obviously we’re on a fixed budget. So we have to ensure that we’re able to pay our partners and with the increased volumes that we were expecting, we had to manage that situation. And within that situation, when there was the different categories and the different products that were being bought along the way, so you, you went from, well, the, the, the kind of the fitness and leisure, you know, everyone’s got told, they’ve got, I think what was there, you know, one, one piece of fitness a day, or one piece of exercise a day you can do.
Rich Lane:
And so everyone was buying their new trainers, you know, finished jerseys and things like that. And so that went a bit crazy. Then I think when everyone got bored of running outside, it was a lot of lounge wear. And then it’s kind of, oh, well, we’re here for a bit of time now. Let’s, that’s the spruce of the home and the garden. So it’s home and garden furniture. And then I think like a lot of us, we, we realized actually, we, we don’t have a hairdresser to go to. So things like hair Clippers and hair dye, you know, went through the roof and that, and I think lately because of the way the weather is, turned, albeit not necessarily today, it’s very much, things like paddling pools. and so these have contributed to an overall growth in transactions, but it hasn’t all been the same products and categories. So on the face of it, the number of transactions has been growing or, or at the very least a kind of a plateau. But it’s been made up of different products and categories at different times, but on a very small scale, over a few days, which is fascinating and, and seeing as a result of that, the, the peaks and troughs and certain partner performance as a result, and, and seeing how much certain partners contribute to certain categories more than others. And as a result of that, that reliance, how they’ve been affected as well. So it’s, yeah, it’s been a quite crazy period and a very challenging one for ourselves. So yeah, I spend, it’s been interesting to say the least.
Florian Gramshammer :
I know it’s only been a few months that you’ve been using the Partnership Cloud, but is there anything that has been particularly useful to you? Particularly as you’re executing against a lot of the strategies?
Rich Lane:
Within the platform, as it is, it means that we can identify, we can go into a partner account, look at their activity in workout exactly what products and categories that, you know, they’re working in. If we went to the partners themselves, they don’t always have that data at hand. So to be able to, the, the, you know, the press of a button, we should say, see who is driving, what category any given time, we can see that those, those micro seasons that I spoke about earlier on, we can look at that and use that for future knowledge in knowing that we can then rely on that partner to, to run that kind of activity. I think that that move over the last few months has kind of enabled us to, to, to open up into different avenues that we haven’t done before. And I think as we do that, the reliance on the insights that we get from the, from the platform will, will, will only increase.
Florian Gramshammer:
Rich, that topic of budget fuels a lot of frequent industry debates, where some people are of the opinion that affiliate budgets generally should be unlimited as a cost of sale more often than not in larger companies. It’s the case that that budget ultimately has to be financed as part of their financial plan. How do you go about that on eBay? and what, what’s your personal take on it as well?
Rich Lane:
Yes, it is. I guess that there is a frustration because some partners would quite rightly turn around and say, well, hang on, we can deliver a thousand of those, why, why are you limiting us at 500. And I completely get that. However, it’s just not how it is with eBay. It’s very much fixed budget. But on the flip side of that, I think it means that we look into the budgets into the, you know, the finite detail. we, we have to ensure that we get in for everything, a certain level of efficiency. And this isn’t just for EPN because this, the, our metrics and our measurement is, is set across the board. So within our marketing meetings, we’ll be measuring up against whether it’s sending you to the paid marketing teams, or, offline activity. And so the business will go, well, that efficiency there is, is greater less, let’s move money into that channel. So it’s in our interests to be as efficient as possible to get more budget because we’re doing efficiently in the first place. So yeah, I get I 100%, I see the frustrations and challenges that finite budget brings, but I think it pushes an advertiser to work smarter with, with, with what they’ve got.
Florian Gramshammer:
Definitely some pros and cons there. Are there certain aspects of the platform that help you achieve managing those budgets?
Rich Lane:
The category pricing is, I think, is a key one that is something that we couldn’t do before. And so if, if we can work with a, a category specific partner, it just means that we can be a lot more efficient and, but also it is better for the partner because rather than us thinking, we’ve got a whole back on a full account increase, that, you know, the eBay account that they’re running is going to get an increase versus one specific category that we want to push gets an increase. That’s going to be more efficient, obviously for eBay, but it means that potentially that partner could arguably earn more money if, if they’re focused on one particular category and we’re increasing that category’s rate. Because we’re not held back because if I’m to try and afford to pay the whole, the whole account increases.
Florian Gramshammer:
I know it’s only been a few months that eBay partner network moved to the Partnership Cloud. In that short time. What are some of the more interesting business outcomes that the platform has enabled you to achieve?
Rich Lane:
With the insights in terms of the data and stuff that we can drill down into, and the resulting output of, of category pricing of different regional category pricing. It means that we can actually tap into our internal trading teams a lot better. So we’re now in a position where we’ve been agreeing with trading to try and help fund, certain, certain agreements. So that wouldn’t have necessarily happened before, because it means now that someone in home and garden, we might want to push a particular home and garden product, and we would then approach home and garden related partner. They, the trading team know that as a result of this process and this relationship, there is a very high likelihood that the efficiency is going to be high because we’re increasing the rate of that category.
Rich Lane:
And so what I was trying to say is, is that it’s, it’s, it’s helping attraction internally as well. Where I think pre migration to the Impact platform, we didn’t necessarily have, we can funnel down so much into those categories. So if a category specific trading team wanted a return, it was that the return was probably not going to be as high as it can be. Now, if you were to, because we’re being very specific with what we’re doing. So, I think I would like to say that, yeah, the, the, the, the relationships with our trading team and the individual category managers and the category teams within the trading team are actually a lot stronger. And I think that that kind of approach will only increase, which can only be a good thing for a lot of the partners that we work with.
Florian Gramshammer:
Thanks, Rich. Really looking forward to seeing you one of those bike rides very soon
Rich Lane:
I look forward to it.
