Lost revenue from eBay was greater than expected over at Valueclick and its Commission Junction unit may be losing another large customer according to the rumormill, LowerMyBills.com.

eBay

“The decrease in eBay (revenue) was larger than we expected...”

This according to Valueclick (NASDAQ: VCLK) and from its second quarter earnings call.  That stated, the company decided to remove eBay’s numbers completely when reporting its affiliate marketing numbers, up 16% overall worldwide.  One can only conclude that this was done to prevent either a loss or a remarkably small gain. 

..."the remaining 1500 clients in affiliate marketing were growing quite nicely,” according to the company which puts affiliate marketing growth at somewhere just below 20% this year (target 2006). 

But how nicely?  That remains a mystery but in revealing its eBay surprise it needed to do some ‘splainin’.  What’s interesting here is that Valueclick’s admission (the key trend behind it) extends beyond eBay and into retail affiliate marketing, a revenue segment that it seems to be caring less and less about.  According to Valueclick…

“The three primary reasons for the eBay reduction were lower negotiated prices effective in January, different payouts to publishers, which are now being paid for performance post-sign-up, and eBay’s decision to buy more of their own keywords themselves versus through our affiliates.”

Source: Shop.org / National Retail Federation (2006)

Like retailers, eBay has decided to take back search.  Big deal?  Indeed, big deal… we’re talking about eBay here—a company that has historically boasted about the big checks it cuts to search-based affiliates.

Valueclick CEO, James Zarley additionally put all the speculation to rest with regard to Commission Junction’s Link Management Initiative.  Why?  Zarley states it plainly, as I have…

“What we have started to do is try and get our publishers to move their tags over to their JavaScript, because we believe that over time that it is going to be demanded more and more on the advertiser side.”

Zarley goes on to recognize that “more data for us” disguised as “advertisers want more control” isn’t a big winner with publishers so far…

“We got a response loud and clear from our publisher that they are not willing to do this on a wholesale basis, but we believe that over time, maybe it takes a year or two, that this will be the way that the market will go. So we are going to be patient with it. Right now, we are just working with our publisher on a one-to-one basis, and eventually I would anticipate that we will get there over time.”

Switching gears, Valueclick seems to be probing new territory—search services expansion (interesting in that advertisers are switching off of affiliates and onto agencies, Valueclick wants to be one of those agencies) among other agency-like products.

“We expanded our search engine marketing services department based on our own proprietary technology, and believe that it will produce additional revenue growth for us in the second-half of the year. We are also adding services in the area of website development and creative services bureau-related products, which in the past has been referred to outside vendors.”

News to me.  I wonder how Pepperjam Management and netExponent feel about these services.

LowerMyBills.com
Although the company’s affiliate manager job listing is still posted live at Monster.com the job may go un-filled.  According to my sources, the company’s largest lenders are fed up with LMB’s generating leads through affiliate marketing techniques.  Why I’m not sure but if I had to bet my life I’d bet lead quality has something to do with it.  Alternatively (or in addition) the high cost for media is only driven upward by affiliates when a lender is dealing with multiple sources for leads.  Translation: The more media cost associated in generating leads the more expensive the leads are—no matter who’s brokering them.

Keep an eye on ventures like Seth Goldstein’s Root.net and marketplaces or “lead exchanges” like LeadPoint.com (founded by Commission Junction’s founding CTO, Per Pettersen).  Don’t miss Seth’s brilliant Gesture Economy rants at his blog, TransparentBundles.  These companies are looking to revolutionize lead generation in some interesting ways.