KYhawk, I found your post very interesting. So, I did a looking search on google and read this...
http://imediaconnection.com/content/4929.asp
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Arbitrage Affiliates Punk’d by Google
January 19, 2005
By
Shawn Collins <!-- |
More by this Author -->
How much will the search company's latest announcement affect affiliate marketing?
I think it’s safe to say that we’ll all remember where we were when we heard the news. I was tapping away at my keyboard back on that fateful day of January 6, 2005 when an email hit my inbox with the ominous subject: Google AdWords™ Announcement: Affiliate Policy Change.
The announcement began “In January 2005, Google will incorporate a new affiliate advertising policy that is designed to provide a better user and advertiser experience.”
Fair enough, I figured. But I noticed that the statement didn’t include anything about the betterment of the affiliate experience, just the user and advertiser.
The Google notice continued, “With this new affiliate policy, we'll only display one ad per search query for affiliates and parent companies sharing the same URL. This way, users will have a more diverse sampling of advertisements to choose from. As always, your ad will be displayed based on its Ad Rank for given searches, which is determined by a combination of your ad's maximum cost-per-click (price) and click-through rate (performance).”
<SARCASM>I felt my heart sink. Had the Four Horses of the Apocalypse arrived for affiliate marketing?</SARCASM>
The blogosphere reacts
Shortly after the announcement from Google, there was much hand-wringing and speculation across marketing blogs and forums.
Beth Kirsch blogged on ReveNews that she was “scratching (her) head at Google’s new AdWords policy that attempts to ban affiliate arbitrage bidding, since one could drive a Mack truck through the loophole left open.”
This was based on the part of the policy about displaying only one ad per search query where the affiliate and company shared the same URL.
As Beth,
Scott Jangro, and others hypothesized, it was all about semantics. According to Salar Kamangar, director of Product Management at Google, the root domain is the key. So affiliate IDs and other appends to a URL will not circumvent the new rules. Nor will sub domains, frames and any other cagey innovation affiliates might attempt.
According to
Jeff Molander, with the changes in Google AdWords, “Google just launched a missile at the affiliate marketing industry itself... not just affiliates.” According to Molander, it’s something of a case of envy on the part of Google. And now, it seems, Google has decided to change from being toll taker to business taker.
But the affiliate networks are not going to just sit there and take it,
opines Molander. “Affiliate networks are fighting back. One, in particular, has rushed out a sloppy email to advertisers (strewn with the usual grammatical and punctuation errors) advising them not to worry ... to sit tight as affiliates make ‘adjustments’ to maintain their Google listings,” said Molander.
Clean up your backyard
While there may be a Cold War going on between the affiliate networks and Google, I am inclined to believe that Google really does want to make a better product available to their advertisers and users.
Kamangar stated that Google considers their ads to be as important as their actual search engine results, and therefore, they want to eliminate duplicate results to provide better AdWords results.
And with my user hat on, I can certainly see that need to clean up the ad listings. After all, how does it enrich the consumer experience to see a wall of ads pointing to the same domain? The reality is that the multitude of affiliate ads stacked up for a single merchant was a case of annoying overkill.
The affiliates that were using pay-per-click search engines to drive their affiliate links directly to merchants were in fat city, because it was low-hanging fruit. This is the sort of opportunity that merchants should have been taking advantage of themselves.
"Part of this movement is due to merchants not adequately policing their affiliates. Merchants need to set stronger policies and oversee them as it relates to paid placement to protect brand and the consumer experience. Far too many merchants let this lag through passive management," says Rob Key, president of Converseon.
I agree wholeheartedly. The arbitrage players weren’t bringing anything to the table, and dare I say it, were essentially parasites. And the new policy was an antibiotic to clean up the system.
Much ado about something
I was chatting with a couple industry analysts in the past week and the burning question was what sort of impact the new rules would have on affiliate marketing.
Last year, I polled affiliates on their various techniques, and one third of all affiliates were using pay-per-click search engines to promote their affiliate links. However, that figure doesn’t break out the arbitrage players vs. the affiliates that were driving targeted traffic to their sites with the hopes of getting the user to click from their site through an affiliate link.
And search is hardly the Alpha and Omega of affiliate marketing. Other affiliate types, many of which are using PPCs to varying degrees, are coupon/rebate sites, reward/loyalty sites, comparison shopping sites, content sites, emailers, data-feed sites and blogs.
There will be an impact, for sure, but I think it’s been greatly overstated. As far as companies go, I don’t think they will take a hit in their traffic and transactions, because I think the activity that was being funneled through the arbitrage players was largely being attributed to the wrong channel.
These affiliates were pulling in commissions for jumping into what may well have been inevitable transactions being referred by Google.
One issue I foresee is an increase in
cookie stuffing by the affiliates formerly known as arbitragers. Now that they’ll have to point traffic to their own sites and do a bit of pre-selling, I think affiliate managers ought to be fine tuning their Spidey sense for an increase in the use of IFRAMEs, JavaScripts, pop-ups and the like, as a means to place cookies.
The affiliate marketing landscape changed when the Google policy went into effect over January 13-14. But if we were to look at the impact as an analogy to the New York City professional sports scene, the death of affiliate arbitrage is hardly akin to the Yankees leaving town. Hell, it’s not even the Mets. It’s more like if the Liberty of the WNBA were gone.
So fare thee well, affiliate arbitrage players. We’ll sort of miss you. Actually no, we won’t.
KY, had you heard this? Are they full of sh*t when they say it's dead?
kyhawk said:
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