The Google Affiliate Juggernaut

There has been a lot of rumor and speculation lately about exactly how and when Google would start becoming an affiliate and taking their sponsored search results and turn them into CPA placements for their Google Affiliate Network partners. Some threads have even gone as far as to call into question how Google has been treating search affiliates and possibly “clearing the space” for them to take over the revenue and commissions earned by these “partners”. Read this scary thread over at Webmaster World.

Here is a screen shot I took today on a routine product search for USB extension cables: (click on the image for a full size view)

search results-sm

There are a few things I find interesting:

1. These results seem to duplicate some of the organic product search results, providing what I consider a poor user experience.

2. The 3 Google Ads take up the large majority of the sponsored listing space, pushing out their other advertisers.

3. Apparently the single URL policy doesn’t apply to these ads, since PC Connection is listed in all 3 sponsored Ads.

Is this the future? If so how will this affect search affiliates and Google’s policies towards affiliate PPC partners? If this is the new direction, will this put pressure on the merchants to be part of the Google Affiliate Network, vs CJ and Linkshare?

I’d love to hear your thoughts!

About Adam Viener

Adam Viener is the Chairman & Founder of imwave, inc, a leading performance search engine marketing agency. Imwave focuses primarily on building and launching effective pay-per-click search engine keyword marketing campaigns for companies paying commissions on sales and leads generated. In both 2009, 2010 & 2011 Imwave was recognized as one of the fastest growing privately held companies by Inc. Magazine. Imwave recently announced they had served over 5 Billion ads for their clients!

Adam, a serial internet entrepreneur, founded one of the first commercial internet service providers (ISPs) in 1993. He has a deep understanding of internet technologies and profitable internet marketing tactics. Adam currently sits on the publisher advisory boards for Commission Junction and the Google Affiliate Network.

Social Media:

Twitter: adamviener
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Adam Viener is the Chairman & Founder of imwave, inc, a leading performance search engine marketing agency. Imwave focuses primarily on building and launching effective pay-per-click search engine keyword marketing campaigns for companies paying commissions on sales and leads generated. In both 2009, 2010 & 2011 Imwave was recognized as one of the fastest growing privately held companies by Inc. Magazine. Imwave recently announced they had served over 5 Billion ads for their clients!

Adam, a serial internet entrepreneur, founded one of the first commercial internet service providers (ISPs) in 1993. He has a deep understanding of internet technologies and profitable internet marketing tactics. Adam currently sits on the publisher advisory boards for Commission Junction and the Google Affiliate Network.

Social Media:

29 Responses to The Google Affiliate Juggernaut

  1. I have to wonder if part of this is spurred by two factors: 1) Internal pressure by GAN merchants to have more share of voice/perks for joining; 2) MSN's relative strength when it comes to product shopping via such things as Cashback.

    Whatever the factors the trend is concerning.

    I do agree with Adam that Scott's approach does make his sites less vulnerable overall.

    Hope to hear from the GAN team on this.

  2. Roger Snow says:

    We have a couple of clients who are looking at joining GAN for this very reason. I think you are right Angel, they are using this as a perk for their existing merchants and to draw merchants from other networks.

    My questions is, what happens to companies like Adam's who spend alot of money with Google AdWords. Will they be forced to work with GAN merchants only?!

    If that is the case, you would think alot of search affiliates would start looking elsewhere as this would limit what they could do.

  3. The GAN team was kind enough to submit a response via email. Here is what they have to say:

    We can confirm that the product listing ads beta discussed in Adam's piece is being facilitated by the Google Affiliate Network platform. At Google, we’re constantly experimenting with new features, tools and visual representations to improve the user experience and usefulness of our ads. In accordance with that philosophy, we’re beta testing a new format to show richer product information, including images, prices and product titles in the ads for shopping-related queries. This test is part of a limited beta and not available to all advertisers at this time.

  4. It's certainly not a coincidence (IMHO) that this corresponds with Google dropping a lot of affiliates from the AdWords program either.

    Their landing pages couldn't have ALL been that bad….

    BUT… the affiliate tax is looming on the horizon in California again. There's a certain search engine that has a vested interest in that particular piece of legislation, now more than ever.

    And they were exceptionally vociferous about it the last time it came up. So this ace has been up their sleeve a while. They didn't dream it up over cocktails last weekend.

  5. Evan says:

    Adam, great reporting thanks for sharing.

  6. Adam Viener says:

    What are your thoughts to the questions I posed?

  7. Evan says:

    First I think Google is going to do whatever they can to generate revenue while attempting to maintain a good user experience. Looks with this like they havent worked the kinks out at all. I think it’s bad if they squeeze out affiliates using PPC to drive traffic. But I think they will continue to allow it but it may get harder to get the traffic. All the more reason to do more organically and with product shopping engines…thoughts?

  8. Scott Jangro says:

    I’ve been seeing a lot of these examples, and have been waiting for the perfect one to capture my frustration. Yours nails it Adam.

    We’re not exactly “search affilaites”, but this has caused us to increase our efforts in other PPC engines, i.e Bing.

    I’ve felt for a long time that the world is changing dramatically for search affiliates. I won’t call it bleak, but it has been getting tougher, and I don’t see that getting any better.

    What’s your own answer to your question, Adam?

  9. Adam Viener says:

    Scott,

    Honestly I am not sure I have an answer to this right now. It is certainly something that I have to give some serious thought to.

    I do think the approach you have taken to create good user experience destinations makes your sites less vulnerable, but at the present time that is not our area of expertise.

    We are still primarily doing paid search directly for merchants and using our technology to maintain good ad placements and drive volume for our partners while keeping reasonable ROIs for ourselves.

    Things always change in this industry, and I think we have built a good team to keep up with that, this latest trend is a bit scary though.

    Adam

  10. [...] The Google Affiliate Juggernaut | ReveNews (tags: affiliate google ppc) [...]

  11. [...] Adam Viener posted an eye-opening screenshot of Google Search results. A search for USB extension cable showed search results containing a very skewed list of search [...]

  12. Pat Grady says:

    read here about "product extensions":
    http://adwords.blogspot.com/2009/11/product-exten

    the pics are the marriage of a merchants feed and their ppc ads.

    here are the requirements to have a "Requirements for Google Product Search listings":
    http://www.google.com/support/merchants/bin/answe

    here, you'll find this:

    "Your listings must provide a way for users to purchase the product online through either a payment service or directly from your website."

    so i'm confused on where the GAN versus other affiliate networks issue arises?

  13. Denny Sugar says:

    That picture pretty much says it all. They made a huge power play right at the holidays. Can't say as I blame them as I'm sure they are making tons of money with it. My guess is that they trim down the ads bit after the holidays as its clearly spammy (if I had a site that looked like that they'd boot me out in a second.)

    We've been focusing more on targeting publications and social media search as the future of small search affiliates seems to be uncertain.

  14. Adam Viener says:

    Pat,

    I think what you are talking about is how any merchant can get their product listings in the organic search results. The product listings in the sponsored results are actually standard affiliate links through the Google Affiliate Network just that Google is the Affiliate earning commissions on the sale. So now they are a network, but also competing with their publishers utilizing their sponsored search engine listings.

    I am not saying I don't think that they should be able to do this, Google has ever right to make as much money as they possibly can. I just wanted to point out that I noticed it and see what others think. Especially in light of some of the comments in the recent webmaster world thread.

    Adam

  15. Denny Sugar says:

    Right Adam, my concern is also that google is cutting out the affiliates in the serp's. Not a big deal for us as we are not SEO's so search is a very small part of our revenue stream, but it changes the game and will make our other channels more expensive as other migrate into the alternative promotional channels we are in.

  16. Pat Grady says:

    Nope, I'm not referring to the organic at all.

    Go to that first link I posted above, it's a new feature they've added to AdWords. Read the details, it's for merchants only.

    Folks here seem to be saying that these are affiliate links – from the link above, the google blog article, I'm under the impression these product images in the sponsored links are a new thing that merchants who use adwords can now do – tie their existing feeds into the ppc ads.

    You seem to be saying these ads with pictures are affiliate links. If my reading is right, these can't be affiliate links – you must offer the pictured products for sale directly on your website, per the rules I linked to.

    Perhaps someone is using the word "affiliate" in a way that is different than how you and I use it.

  17. Pat Grady says:

    And by "someone" (using the word affiliate), I don't mean you or me.

  18. Pat Grady says:

    Further, there are now controls within AdWords where the merchant, one who has their feeds in their merchant data center account, can control which images / products (may) show for particular AdWords ads.

    It might help clarify things for others here if, since your screenshot shows both organic and sponsored images, that you mark your screenshot to make it clear we are discussing the ones on the upper right.

  19. Pat Grady says:

    I see what you're talking about now, the url for those ads with pictures appear to be using the clickserve.cc-dt.com domain.

    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.

  20. Pat,

    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.

  21. Adam Viener says:

    Pat,

    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

  22. Amit says:

    Great article and definitely scary for smaller affiliates like me. I totally agree that Google has every right to make as much money as they can. Also my affiliate business's success is my sole responsibility and not Google's.

    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.

  23. Merry Xmas from Google – Affiliates get Adwords Bans…

    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.
    ……

  24. T Foster says:

    Great article. This is obviously a hot button issue for the CPA space. We look forward to learning more about the direction of the issue in coming months.

  25. Adam Viener says:

    Pat,

    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

  26. David Lewis says:

    I think it is too soon to say that this is a way to push GAN. There could be serious anti-trust issues in that. There are other possibilities but none are good for affiliates.

    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.

  27. In case everyone missed it, Larry Adams of Google provided an official answer during our interview as part of the 2010 Affiliate Marketing Preview Series: http://www.revenews.com/angeldjambazov/2010-affil

  28. [...] with pricing, and depending on who you ask, they are either Google Affiliate Network merchants (see this post at ReveNews), or, based on the AdWords blog post, a connection between AdWords advertising and corresponding [...]

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