The Search Marketing Advisor Newsletter Article:
January 2005, Volume 4, Issue 1

Google’s New Affiliate Policy: What it Means to Search Marketers

by Ben Perry, Paid Search Manager, iProspect

Google recently announced that it would display only one ad per unique URL per search query on its AdWords network. This is an evolutionary step Google is taking to enhance the user experience, but it’s generating a lot of buzz within the industry because it affects so many wallets. The concept is relatively straightforward, and the benefit to the Google end user is clear – users will see less repetition, and more variety, of sponsored search result content.

This is one of the many things I enjoy about the search engine marketing space. A policy change takes place at one of the major search engines and search industry geeks like me get to assess its impact on the marketplace, and provide strategic recommendations on how marketers should adjust their paid search campaigns. With that being said, let’s look at what this change will mean to advertisers.

Short-Term Implications

Google’s policy change has created a sub-auction on keywords where affiliates compete. So short term we’re likely to see increased click costs on keyword auctions where affiliates compete. A company and all its affiliates must now compete for one single position on the page and that ad must, in turn, compete in the main auction against actual competitors. The victor in the sub-auction is determined by cost-per-click and click-through rate, just as in the main auction. Therefore, affiliates will likely be more aggressive about creating compelling copy for their ads – and will be aided by the fact that the “aff” designation is no longer required to denote that the ad is being placed by an affiliate. The larger short term impact will be increased cost-per-click costs, driven by affiliates who can’t compete on click-through rate.

Another possibility is that nothing much will happen as a result of this change because affiliates have always, and will always, find ways around any new policy. For example, affiliates could simply set up a landing page on a different domain and re-direct the user immediately to the company destination page. As pointed out on ClickZ, this policy change is analogous to efforts made by search engines in the past to clean up the natural search results. Google is skilled at identifying and thwarting such efforts to circumvent the spirit, if not the letter, of its policies. So I believe that over time it will become increasingly difficult to employ these strategies and they may even come to be regarded as “black hat” ad-buying practices.

Long-Term Implications

Peering just over the horizon, I can envision a time when the only way to effectively compete as an affiliate is to create unique content. Companies with affiliate programs should encourage their affiliates to create unique sites with useful information. This is a legitimate strategy that totally complies with Google’s policy. A single company could still dominate any given keyword auction by having enough affiliates with unique sites competing on the auction.

This could have the secondary benefit of appealing to a broader range of consumers. Instead of one landing page with one value proposition, you could have many sites that could appeal to a range of customer personas. It is also possible to have affiliate sites that target just one set of a company’s products. This laser focused targeting could produce affiliate sites that do a better job of selling than the company’s own site – a situation that probably exists today. Companies are likely to end up with a smaller number of higher quality affiliates, and they may be willing to pay more to these affiliates because of the increased value they deliver.

As with any change, there will be a period of uncomfortable adjustment. However, I believe that this policy change will ultimately be very positive for users, for companies, and for the affiliates who are serious about their craft.

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The Search Marketing Advisor Newsletter Article: January 2005, Volume 4, Issue 1

Google’s New Affiliate Policy: What it Means to Search Marketers

The Search Marketing Advisor Newsletter Article:
January 2005, Volume 4, Issue 1