largenewgooglelogofinalflat-a

Networks and Marketers May Profit From Google Affiliate Network Shutdown

  |  April 18, 2013   |  Comments

Google's exit could be good news for competitive affiliate networks and affiliate program management companies.

The closure of Google Affiliate Network (GAN) will create a lot of work for affiliate marketers. But Google's exit is good news for competitive affiliate networks and affiliate program management companies, which have leapt to snap up the business dropped by Googliath. Ultimately, getting kicked off GAN may be better for affiliates, too.

The Google Affiliate Network let advertisers buy and track affiliate ads on a cost-per-conversion basis. Publishers could quickly post the ads and get paid via AdSense when a user clicked through and converted. On Tuesday, Google announced it would wind down the network over the next few months. In a blog post, J.J. Hirschle, head of Google Affiliate Network, cited the rapid evolution of CPA advertising and said the company would focus on newer CPA tools like Product Listing Ads, remarketing, and Conversion Optimizer. Google did not make an executive available for comment.

Businesses that depend on affiliates to drive traffic and sales will need to first find a new network to manage their accounts and then notify affiliates of the new network, so that affiliates can sign up. Affiliates, for their part, will need to keep track of where their merchants have moved, sign up, and then replace all the affiliate links in their sites.

Says Tricia Meyer, who operates 12 affiliate sites including SunshineRewards.com, and averages $25 million in annual sales, says that while larger affiliate sites may be run off a database and need to replace a single link per merchant in that database, "If you're a blogger, every time you write a blog post about a merchant, you pull a link from Google. So you might have to replace every link in five years of blog posts."

Acceleration Partners is one of the many affiliate program management companies that has offered free evaluations and help in migrating from GAN. "A lot of people want to look at their programs, but it's a lot of work to change. It's a good time [for a merchant] to look at the whole affiliate program, like clearing house before you move," says Bob Glazer, co-founder and managing director. "Google is encouraging everyone to get off the network quickly, and we think we'll benefit from people seeking strategic advice."

GAN was likely not a priority for Google, according to Glazer. "It was something they inherited through their acquisition of DoubleClick, and it doesn't fit into their model," he says.

A June 2012 report by Forrester for affiliate marketing platform Rakuten LinkShare found that affiliates are profitable for advertisers, drawing new customers, often triggering reconsideration and closing the sale. Moreover, affiliates attract consumers who tend to spend more than the average online shopper.

By 2016, affiliate marketing will represent slightly less than 16 percent of the total spent on paid search, Forrester said, while total affiliate spending will reach $4,474 million that year.

More important was channel conflict, as Google began to compete directly with affiliate marketers via its product listings, which usually appear at the top of product search results.

Glazer said that many in the affiliate marketing industry still need to fear Google, despite its shutdown of GAN."What is Google's take on affiliate marketing?" he asks. "Will they make it harder for other people to operate in it? Some fear they will potentially impose their will to make it easier to do advertising directly with Google. With Google getting out of conflict of interest with the affiliate industry, they may be looking to direct more advertising dollars to their other platforms."

Google Product Listings not only compete with affiliate marketers, they will continue to take a bite out of affiliates' profits, says Meyer. But those who suffer worst will be those who relied on Google for their traffic. "It depends on how you do your own marketing," Meyer says. Affiliates with loyalists who come to them directly, and those who market directly to those loyalists via email, Facebook, and other channels will likely see little effect, she thinks. "But if you rely on search engines to drive affiliate traffic, you will be hurt by it."

In fact, Meyer says, the closing of the Google Affiliate Network could be the best thing that happened to the latter group. They may have begun with GAN because it's a well-known brand and never looked at the offerings of other affiliate networks that have more robust technologies, will bells and whistles like widgets and pay-per-call.

"When these merchants actually start looking at different networks," Meyer says, "they'll realize that they're getting networks that are actually better. They think Google does everything right, but it didn't do affiliate marketing that well."

Tags:

ClickZ Live San Francisco This Year's Premier Digital Marketing Event is #CZLSF
ClickZ Live San Francisco (Aug 11-14) brings together the industry's leading practitioners and marketing strategists to deliver 4 days of educational sessions and training workshops. From Data-Driven Marketing to Social, Mobile, Display, Search and Email, this year's comprehensive agenda will help you maximize your marketing efforts and ROI. Register today!

ABOUT THE AUTHOR

Susan Kuchinskas

Susan Kuchinskas has covered interactive advertising since its invention. The former staff writer for Adweek, Business 2.0, and M-Business covers technology, business and culture from Berkeley, CA.

COMMENTSCommenting policy

comments powered by Disqus

Get the ClickZ Search newsletter delivered to you. Subscribe today!

COMMENTS

UPCOMING EVENTS

Featured White Papers

BigDoor: The Marketers Guide to Customer Loyalty

The Marketer's Guide to Customer Loyalty
Customer loyalty is imperative to success, but fostering and maintaining loyalty takes a lot of work. This guide is here to help marketers build, execute, and maintain a successful loyalty initiative.

Marin Software: The Multiplier Effect of Integrating Search & Social Advertising

The Multiplier Effect of Integrating Search & Social Advertising
Latest research reveals 68% higher revenue per conversion for marketers who integrate their search & social advertising. In addition to the research results, this whitepaper also outlines 5 strategies and 15 tactics you can use to better integrate your search and social campaigns.

WEBINARS

    Information currently unavailable

Jobs

    • Internet Marketing Campaign Manager
      Internet Marketing Campaign Manager (Straight North, LLC) - Fort MillWe are looking for a talented Internet Marketing Campaign Manager to join the...
    • Online Marketing Coordinator
      Online Marketing Coordinator (NewMarket Health) - BaltimoreWant to learn marketing from the best minds in the business? NewMarket Health, a subsidiary...
    • Call Center Manager
      Call Center Manager (Common Sense Publishing) - Delray BeachWanted: Dynamic Call Center Manager with a Proven Track Record of Improving Response...