Google kiss of death to affiliates?
There's been a lot of talk going on around some of the major forums about a rumor that Google is going to cut or severely curtail the ability for affiliates to place AdWords ads. It has gotten a lot of response, especially (of course) from affiliates.
First off, I always take rumors with a proverbial grain of salt, and would for this one also except it was started by someone who is well respected with good connections. So at least thought needs to be given to the what-if scenario.
If I were top management at Google, after a recent IPO (initial public offering), and after seeing a run-up in the price of my stock which I either owned or had stock options for, I certainly wouldn't want to kill the golden goose. Not only do affiliates spend a lot of money with Google, but they also cause others to spend even more, since AdWords is an auction environment. For example if you want to get a commission for a sale of a Harry Potter book, and you place an AdWords bid to send traffic to amazon.com, you are competing with many thousands of other amazon affiliates doing the same thing. Since only 8 ads can be shown on the first page of search results, people raise their bids in order to be shown on that first page.
Now, if we take away all the affiliate ads, what's left? An ad from amazon.com themself. An ad from Barnes and Noble. Maybe some other book stores. Maybe from eBay, who does a lot of PPC bidding (but not from eBay affiliates anymore of course). So the competition for that first page comes down drastically, and the price required to be #1 plummets. Who loses? Google, of course, and their shareholders who bought stock at high levels.
The rumor is that Google will ditch affiliates to make the search experience more meaningful for its searchers. I don't know how that will happen. Yes, there won't be a whole page full of amazon affiliates on the Harry Potter page, but will their demise mean a less pleasurable search experience? Maybe I'm missing something, but regardless of whether 8 people are sending traffic to amazon or Barnes and Noble, or whether amazon and Barnes and Noble are sending their own traffic to their sites, it's still the same bloody book, isn't it? If there's a glut of similar ads on the right hand side of the search results, there are still free ads on the left hand side, and after all isn't it Google's job to manage THAT, and let the free market auction system take care of the ads?
I don't see it happening, but I've been wrong before, and I'll be wrong again. Most likely there will be some less drastic policy change than the rumors have suggested, and the market and the affiliates will adapt. In the meantime reading the forum posts from the Chicken Littles thinking the sky is falling has been interesting.
What do I suggest if you're a beginning AdWords advertiser? First, don't quit your day job quite yet. Second, go on with life and the rules as they're currently written. If they change, they change for everyone. Third, make lemonade out of lemons if need be. There will still be plenty of ways for affiliate marketers to make money, with or without Google AdWords as it exists today. In fact it may be even easier if this scenario happens. But that's a discussion worthy of a post of its own in the future.
First off, I always take rumors with a proverbial grain of salt, and would for this one also except it was started by someone who is well respected with good connections. So at least thought needs to be given to the what-if scenario.
If I were top management at Google, after a recent IPO (initial public offering), and after seeing a run-up in the price of my stock which I either owned or had stock options for, I certainly wouldn't want to kill the golden goose. Not only do affiliates spend a lot of money with Google, but they also cause others to spend even more, since AdWords is an auction environment. For example if you want to get a commission for a sale of a Harry Potter book, and you place an AdWords bid to send traffic to amazon.com, you are competing with many thousands of other amazon affiliates doing the same thing. Since only 8 ads can be shown on the first page of search results, people raise their bids in order to be shown on that first page.
Now, if we take away all the affiliate ads, what's left? An ad from amazon.com themself. An ad from Barnes and Noble. Maybe some other book stores. Maybe from eBay, who does a lot of PPC bidding (but not from eBay affiliates anymore of course). So the competition for that first page comes down drastically, and the price required to be #1 plummets. Who loses? Google, of course, and their shareholders who bought stock at high levels.
The rumor is that Google will ditch affiliates to make the search experience more meaningful for its searchers. I don't know how that will happen. Yes, there won't be a whole page full of amazon affiliates on the Harry Potter page, but will their demise mean a less pleasurable search experience? Maybe I'm missing something, but regardless of whether 8 people are sending traffic to amazon or Barnes and Noble, or whether amazon and Barnes and Noble are sending their own traffic to their sites, it's still the same bloody book, isn't it? If there's a glut of similar ads on the right hand side of the search results, there are still free ads on the left hand side, and after all isn't it Google's job to manage THAT, and let the free market auction system take care of the ads?
I don't see it happening, but I've been wrong before, and I'll be wrong again. Most likely there will be some less drastic policy change than the rumors have suggested, and the market and the affiliates will adapt. In the meantime reading the forum posts from the Chicken Littles thinking the sky is falling has been interesting.
What do I suggest if you're a beginning AdWords advertiser? First, don't quit your day job quite yet. Second, go on with life and the rules as they're currently written. If they change, they change for everyone. Third, make lemonade out of lemons if need be. There will still be plenty of ways for affiliate marketers to make money, with or without Google AdWords as it exists today. In fact it may be even easier if this scenario happens. But that's a discussion worthy of a post of its own in the future.
0 Comments:
Post a Comment
<< Home