How Auction Ads Earns Money - Simple Maths

A lot of people seem to be under the misunderstanding that auction ads makes no money from their publishers, this is simple not true. Its quite simple how they earn money. I shall explain

How auction ads work

You put the code on your site an its create a bunch of ads linked which when clicked sends the visitor to ebay. When one of the users you refer wins a bid you earn a percentage of the commission earnt by ebay. Auction Ads states that a least 100% of the commission from ebay is given to the affiliate. As far as i know this is completely true.

So if 100% of the revenue is sent to the affiliate how does auction ads earn money?

Well its pretty simple really..

All auction ads link to ebay using the same affiliate tracking code. Which means the money from every successful transaction is initally credited to auction ads. A separate sub-id is used to track which publisher should receive the revenue.

You can see this in the auction ads ebay links

Location: http://rover.ebay.com/rover/1/710-5...cb7_fda1d219536a4d362618596885fe3653_digital&
AID=9479574&PID=2334146&loc=http://search.ebay.co.uk/digital-cameras

AID is the auction ads affiliate id
PID is the id used to track the publisher.

Now look at the commission structure for ebay


$0 - $99.99 ->50.00%
$100 - $4,999.99 ->55.00%
$5,000 - $199,999.99 ->60.00%
$200,000 - $699,999.99 ->65.00%
$700,000 - $2,999,999.99 ->70.00%
$3,000,000 + ->75.00%

imagine three publishers sign up for auction ads.

The publishers perform as follows

Publisher 1: generates $5100 worth of sales
Publisher 2: generates $250000 worth of sales
Publisher 3: generates $3000 worth of sales

Based on tiered commissions each publisher will earn the following revenue (this is based on the assumption that auction ads takes into account tiered commission, i don't know if they do)

P1: (50% of $100) + (55% of $4899) + (60% of $100) = $2804
P2: (50% of $100) + (55% of $4899) + (60% of $194,999) + (65% of $50,000) = $151644
P3: (50% of $100) + (55% of $2900) = $1645

Total paid out to 3 publishers is 2804 + 151644 + 1645 = 156093

But bearing in mind that all of these sales are initially credited to the auctions ads affiliate code effective auction ads has generated $258,000 of sales

So the commission earnt by auction ads is

Auction Ads : (50% of $100) + (55% of $4899) + (60% of $194,999) + (65% of $58,000) = $156844

therefore auction ads earns 161293 - 156093 = $5200

this is based on the assumption that they pay the same tiered commission as ebay if they don't then their earning is higher

they would get 161293 - 129000 = $32,293

 

I think people look at the 100% and figure they get paid that and auction ads does not make any money.

 

We can't make anything if they are serving up rubbish which is happening yet again today.

 

I think Jeremy Shoemoney will not serious on his AuctionADS if his creation cannot earn money from eBay.

Above very clear explanation why Shoe more rich by give a services for thousands AuctionADs publsher

 

I was under the assumption that Auction Ads payed out commissions based on the entire AuctionAds member base's earnings. See my AuctionAds review here. I thought AuctionAds was all about the power of the group?

We need to know the answer to this.

 

you could be right. in the FAQ it points to ebays payment structure which i assumed is a publishers earnings are calculated.

If they do payout at the top level for every publisher i'd love to know how they are paying for all their hardware.

 

Excellent post - i have wondered how AA was making their money and this explains it so that even a 'tard like me can understand it..
Green for you!

 

Quite frankly, if they are basing your commissions on the eBay commission structure per individual I'm not sure the advantage of using the service is then?

When they say they are paying "100% of eBay commission structure" I thought that was based on the group. I figured they were running things at a loss at first. And because of the high volume of sales the group will be generating, they should be able to take some of the commissions for themselves while still passing on higher commissions than you would make going solo.

Does anyone know the answer to this? Guess I can just email AuctionAds.

 

Some of the advantages are:

• It's easy and fast to setup
• Automatic GeoTargeting
• Great keyword targeting

 

Don't forget that you:

1. Get the highest tier of payout which would be hard to hit if you were going solo.
2. You don't have to worry about CJ & their annoying payout system
3. You get paid at the end of every month right into paypal, promptly

imo, Auctionads has been a great compliment to some of my sites that weren't earning as much as they should be & makes it much easier for me to maximise these earnings without having to mess around with CJ.

 

as a publisher, you have nothing to lose with auctionads, just that they are credited with more than 50% and only credit you with less, because you don't sell enough. but all the publishers sell enough so the company gets a higher commission.

Anyway, i haven't seen anyone happy with auctionads. I only had a few sales from hundred of clicks and a lot of impressions.

 

Forgot about that one - that is probably the best reason - Net 0 payments right into PayPal FTW !

 

That's pretty much the point I was trying to make. That was my assumption as well, but if that is true then amnezia's post about how they make money would not actually be true. I'm just trying to get some facts on that.

And yes, I agree there are some advantages to using AuctionAds over CJ but the "group based" commission structure would be the main reason I'd recommend the program.

 

It what the first poster of the topic posted is correct than thats not true.

 

Basically all of your assumptions are incorrect.

Jeremy has stated several times - all commissions are being passed directly to publishers. He isnt keeping a dime. SO if auctionads is in the 75% tier, then your gettting the 75%.

This is temporary while he builds his publisher base. Then he will determine how best for AuctionAds to earn an income.

 

Great plan. Reminds me of the companies from the .com bubble. Worry about revenue later. Seems scary to me. Chitika does something similar, but pays publishers on a eCPC basis based on what they earn from affiliate programs. Doesn't make sense to me either. But I wish both companies the best of luck.

 

Well, it does make sense. The system is a little buggy - so while all the kinks are worked out why not pass 100% along.

Keep in mind - this is ebay's affiliate program he's working from - so its not really costing him much to run things a this point. Just the server cost and maybe an employee or two.

 

Thanks for that. I was wondering how auction ads made money. now i know

 

I've also heard that it could possibly not be using the CJ affiliate program. Basically he creates his own affiliate network and then negotiates directly with ebay. This way AA would get any commission fees that would otherwise go to CJ. ... or he could just be setting up this venture to be bought out by a larger company

 

All of this is speculation. Best to just wait and see.