Direct Linking & Display URL Usage: How to Work with your Search Partners

There has been a long running debate in the performance marketing industry about what permissions a company should offer their search partners. Should we allow our search partners to link directly from their Google PPC ads to our site through our affiliate links? Should we allow our search partners to use our company’s domain name in their display URL? What affect will their ads have on our own campaigns being run either internally or via an outsourced search agency?

These questions have become more and more difficult to analyze as the search engines have adjusted their policies. For example, when Google first implemented the policy of only allowing one sponsored ad per display URL, the performance marketing industry flinched. Companies who didn’t understand Google’s pre-auction process, started pulling back on allowing any search partners to run ads with their display URL thinking that their own campaigns wouldn’t work anymore, and that these search affiliates would only eat away at their profitable campaigns without adding any incremental value. Some innovative search publishers reacted by working with their partners to come up with alternative URLs that would allow multiple ads to display while still leading to the same page, while other search publishers started building landing pages to market their partner’s sites, also taking up multiple ad positions.

Google reacted by implementing a policy that all display URLs in ad copy must match the final landing page URL. This meant that the alternative URL direct linking to the merchant site idea would no longer work. Google also started selectively looking at affiliate landing pages to determine if a landing page was a “bridge page” solely for the purpose of promoting a single company. When these pages are identified as a bridge, Google assigns a much lower quality score and the affiliate’s bid prices go up dramatically, effectively shutting down those campaigns. There has also been some speculation that Google has linked some of these bridge pages to the company’s own domain name, so that these ads then compete for the single ad placement, just as if they were direct linking and using the same display URL.

A recent article was posted on Search Engine Land entitled “Direct Linking Affiliates: Nuisance Or Serious Problem?” by Lori Weiman, who works for a company whose goal is to present direct linking affiliates as a serious problem, create fear, and then sell a solution that helps track and report on this “problem”. In this article Ms. Weiman makes a number of arguments:

Will Direct Linking Search Partners Increased your CPC?

Ms. Weiman suggests that direct linking search partners will increase the cost per click of your own ads because affiliates will have the same quality score and therefore your ads will only be competing on bid price to determine which ad will be displayed. She also suggests that you and your partners will need to keep increasing your bids to out bid each other, thereby raising your costs.

I would respectively disagree with Ms. Weiman. First of all, when you understand Google’s “pre-auction”, it’s actually the affiliates who companies push towards using an alternative URL that actually drives up a company’s bid costs. These ads actually compete with each other in the final keyword auction to determine exactly how much each must pay for its position. Secondly, affiliates and their partners come from very different economical positions when it comes to keyword bid prices. Affiliates are typically making only a fraction of what the company is making on any given sale, therefore, the bid price at which the company can be profitable is often much higher than what an affiliate can afford to bid for any given term to remain profitable.

Will Direct Linking Affiliates Reduce your Clicks and Impressions and cause Data confusion?

Ms. Weiman suggests that if an affiliate ad is displayed instead of your internal ad, that the company is losing clicks (and ad impressions) to the affiliate and that this will somehow affect your ROI and CPA analysis for your keyword lists.

I have heard this argument before coming from search agencies who want to keep 100% control and be able to be 100% certain that a click is never lost to an affiliate so that they can have what they call a fully accurate view of their search statistics. First, I am not sure that I would consider a click that comes to the company through an affiliate link a lost click. I would argue that having some good quality search affiliates promoting your program would actually increase the overall clicks to the company’s site and increase overall sales as well.

For any company, there is a vast number of potentially available keywords to bid on. I have yet to find a company who has been able to identify the entire set of possible keywords that will convert for them. This includes companies running their own “robust campaigns”. Turning off quality search partners could mean not having full coverage on all of these terms and not generating the incremental sales that come from them, or worse pushing these same partners towards your competitors.

So I would ask, is it more important that the search agency or internal search team be 100% certain that one of their potential clicks never comes through the ad of an affiliate, or is it more important to increase the overall number of clicks and sales at a measurable CPA?

Will Direct Linking Affiliates cause Cookie Confusion?

Ms. Weiman suggests that since consumers often search on multiple keywords and often click on a number of ads before actually purchasing. She contends that you would be paying twice for the sale if a costumer clicks on an affiliates’ ad, gets a cookie, and then clicks on one of your paid search ads and purchases the product.

This brings up the whole “Attribution” discussion that could be its own blog post. I do agree that this “could” happen; it is also just as likely if not more, that a potential customer clicks on one of your partner’s ads (costing them money) and then calls the 800 number to order, or walks into the store to make a purchase. Reports have indicated for every dollar spent online, six are spent offline. On both of these cases the search partner doesn’t typically get compensated. They deal with this by tracking and measuring their revenues and online conversions for each keyword.

I am a strong advocate for not having a wide open search policy. What I suggest is that you look at your program and identify 1-2 search partners that you can trust, and test direct linking to see if it can generate incremental sales without affecting the success of your own internal search programs.

If you attended Affiliate Summit West in Las Vegas, you may have had a chance to hear Tony Pantano, CEO of imwave, discuss this topic. Unfortunately, his time slot competed with the Steelers playoff game and lunch, so Shawn and Missy ave been gracious enough to let me post some excerpts from his presentation. In this segment of the presentation, Tony talks about the issues and some of the misconceptions of direct linking and use of the company’s display URL by your search partners:

Other videos from this session will be posted at http://www.youtube.com/imwave as they are available.