Following Google’s decision to change its AdWords policies, some affiliate marketers are expressing concern, while others are quite pleased with the move.
“I think this is fantastic for the end user. It should lead to higher-quality sites being advertised,” said David Lewis, president of 77blue, a private-label shopping site provider. “Advertisers are either going to have to build quality sites, or disappear altogether.”
Lewis said the move will benefit affiliates who add value to a merchant’s marketing program by providing useful information, linking directly to specific, relevant areas of a merchant’s site, and investing time in optimizing the message they are conveying.
“I see this as great for us, I’m thrilled. There are terms that we haven’t been able to advertise on because users just click on the arbitrage ones, because they think they’re going to the merchant,” Lewis said. “I hope merchants don’t decide to throw the baby out with the bathwater and ban all affiliates from advertising.”
Lewis believes merchants should pick their partners wisely, and then identify and nurture their top affiliates who treat the relationship as a partnership.
Other affiliates are not yet sure if the move will help or hurt them. On the one hand, they think it could help them by weeding out affiliates who are less dedicated to the practice. This would open up opportunities and lower costs of advertising on Google. On the other, they fear that Google’s new policy change will make it harder for PPC search affiliates to make money.
“It is too early to tell how this change will affect me personally. It could go either way,” said Adam Viener, president of affiliate and search engine marketing agency Imwave.com. “My gut feeling is that the people doing search engine arbitrage on a part-time basis will not have the time or inclination to take their marketing efforts to the next level.”
Imwave currently markets as an affiliate of around 200 merchants, including eBay and HomeGain, mainly through PPC search engine ads. Viener believes companies that rely on a lot of search engine affiliate traffic, such as eBay, Amazon, Overstock, and BizRate, as well as affiliate networks like Commission Junction and LinkShare, will also be hurt by the changes.
A spokesperson for eBay said it is too soon to tell how the new policy will affect its affiliates, but added that the company, which derives a large amount of traffic from its affiliates, is working to develop new tools and programs to help them adapt to the changes.
Viener said the new policy will make it more difficult for an affiliate to start working with new merchants. Previously, he could link directly to the merchant without investing time in building a merchant-specific site. This would allow him to quickly determine if he would make or lose money with that merchant. For those links that converted the traffic and performed well, he would build a merchant-specific site.
One unintended result of the move is that the extra steps that will be required of affiliate marketers that advertise on Google — like building a landing page for merchants they work with — will prepare those affiliates to advertise on Yahoo’s Overture, Google’s direct competitor.
“I see myself doing a lot more marketing on Overture this year since I will have more Web sites,” Viener said. He also expects to expand his search marketing consulting activities to limit his risk.
Overture’s policy is to forbid advertisers from linking to a site they don’t own. This disallows any search arbitrage, and requires any advertiser to link to a page that they control.
Matt Naeger, VP and general counsel at search engine marketing firm Impaqt, said the policy as it is currently worded will not have a large-scale impact, but it is a welcome move.
“Overall, it will help. It’s a step in the right direction,” Naeger said. “As it gets fleshed out, they’ll learn some things from it, and learn where the gaps are in the policy. It’s the same kind of things that happened when they started going after people that were spamming the organic search results.”
Some of the main flaws Naeger sees are that the policy does not address affiliates that create sites with similar URLs to a brand owner, or other trademark management issues, he said. Depending on Google’s enforcement policy, it could also could be side-stepped by advertisers who change their landing page to redirect to the merchant’s site once their ad has been submitted and approved by Google.
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