It is reasonable to assume that Google chose to beta test these placements with GAN links as not only is this information available to Google, all of the conversion data is there as well. Wouldn't you want that data if you were developing this service?

So either (a) Google is doing this to help GAN, (b) Google is becoming a super affiliate and will sign up with other networks and add stores from all networks as a way to monetize this area, (c) Google is testing with GAN links and will open it up to any store that actually sells product. For (c), it is possible that the only way to pay on a CPA basis (instead of CPC or CPM basis) will be to join GAN or use Google Checkout exclusively for payment processing. That could simply be a tracking issue.

No matter how it shakes out, affiliates (not incluing Google) will not be seeing their own links in Product Ads.

You said:

"If G is indeed acting as a commissioned based affiliate themselves here, then I completely understand the uproar that would follow."

In response, I wanted to let you know that I talked to some of my contacts at the Google Affiliate Network, and these are indeed a house account for Google where they are earning CPA's on the sales.

They are apparently "testing this new ad unit" and using GAN and the current commissionable product feeds that exist in the network was the quickest way to market.

I guess they wanted to get it launched by Christmas to get a good idea as to how these new ad units work for them.

Adam

I feel bad for all the affiliates that have gotten the ban hammer. Tied into the issue of the Adwords bans, there has also been much speculation about whether Google is trying to become the world’s largest affiliate.
……

Now that Google has/will become the biggest affiliate in the GAN network, and I am sure merchants will rush to join GAN because of this, what incentive will the smaller affiliates have to join or even stay in GAN. When merchants will want to take their business to GAN, smaller affiliates will want to get out of GAN. Will GAN then become a one network, one affiliate, many merchant juggernaut.

I think the interesting thing to note here is if you actually do the search on Google and look at these sponsored product links, they are all Affiliate links through the Google Affiliate Network, using the same publisher ID. My understanding is that this is a "google house" account and the Google Affiliate Network is serving up these ads and earning a commission on the sale as the publisher in the affiliate transaction, making these Google CPA sponsored links.

Adam

I think you are right that products can now be displayed in Adwords. However, it was GAN's response that indicated they were allowing merchants to "beta test" this feature (presumably through affiliate partners) and that this test was for "shopping-related queries" and "not available to all advertisers at this time".

GAN would have a definite advantage allowing merchants to plug in directly via their network dashboard. While this advantage, in my mind is acceptable, it does beg the question whether affiliates who are displaying merchant products via search would be given preferential treatment in AdWords because they are promoting GAN merchants.

We may both be right!

These picture ads may indeed just be for merchants who use feeds, and no affiliate is actually involved at all, but for some reason, G happens to be pumping the clicks through the same link structure as their affiliate network.

Or perhaps since nobody has signed up yet, they internally picked a couple of merchants that they work with on feeds, within their aff network, and are using these hand selected merchants to roll out these new ppc ads with pictures.

If G is indeed acting as a commissioned based affiliate themselves here, then I completely understand the uproar that would follow.