Google Changes the Affiliate Industry

[Linda Buquet]

I wanted to repost Garretts thread here where it would get more discussion. I would like to hear what all of you think.

-----------------------

Posted: Mon 1st Mar 2004, 1136
Post subject: Google Changes the Affiliate Industry

------------------------

“Google AdSense has changed the affiliate industry.” This statement was made at last week’s WebmasterWorld PubConference during an informative affiliate session directed towards both affiliates and merchants.

Adwords and the Affiliate Game. If you are a merchant should you allow your affliliates to buy AdWords? Speaker Adam Jewell attempted to answer this question.

First, he discussed affiliates and questioned whether they should use AdWords themselves. For starters, a candidate would need two important things: time and money.

It’s important to keep prices low. Affiliates work in small markets and can’t afford the larger clicks. To affiliates clicks are worth 60 cents per click at the most, he says. This reduces competition between merchants and affiliates.

Affiliate managers should provide landing pages without pop-ups when using AdWords. It’s also important to educate your affiliates and provide tutorials whenever possible.

Losing Money? Don’t Sweat It. He said you're guaranteed to lose money at first although you can make up to tens of thousands per year. Like most aspects of business, it just takes time to start making profit.

What do the affiliates and merchants out there think? What impact has Google had on the affiliate industry?
_________________
Garrett French
Editor, WebProNews.com
http://www.WebProNews.com

What do you think?

[jeffmolander]

“Google AdSense has changed the affiliate industry.”

Says whom? Adam Jewell? Who is he and what are his qualifications to be discussing this subject? Sorry... I'm just arriving on the scene here. Can someone enlighten me?


Affiliates work in small markets and can’t afford the larger clicks. To affiliates clicks are worth 60 cents per click at the most, he says. This reduces competition between merchants and affiliates.

This is very broad sweeping. What affiliates can afford depends purely on their ROI. Moreover, the profit margin that they are seeking to achieve. 5%? 50%? Different strokes for different folks and then again volume plays into it as well. I do not agree with anyone who suggests that it's as simple as a single number.


Affiliate managers should provide landing pages without pop-ups when using AdWords.

Why?


Losing Money? Don’t Sweat It. He said you're guaranteed to lose money at first although you can make up to tens of thousands per year. Like most aspects of business, it just takes time to start making profit.

Hu? This one is really pointless.


What impact has Google had on the affiliate industry?

Folks, Google IS the affiliate industry. Honestly, it goes much deeper than this post. If anyone wants to talk about it seriously let me know!

Essentially, Google and Overture have completely enabled the affiliate industry. They have not done it alone, though. Marketers have been asleep at the wheel for years now, allowing affiliates to slurp up commissions based on sales that would otherwise have cost marketers a dime to capture - at most. Why? Mostly ignorance fostered by not only affiliates but the affiliate networks who stand to benefit ONLY from affiliate gains.

Let's get real: Marketers have placed their trust in networks. Why? Simple... "nothing gained? nothing lost." No sale means no cost. "Free branding." (remember that one - well, it's alive and well in the world of affiliate marketing)

The proposition of not having to pay unless a desired action occurs has proven to be too much for marketers. They have intoxicated themselves on this and a promise of teeming millions of "affiliates" (sounds cool, doesn't it?) who will all act as one's sales force. Who are these people? How do they do it? Are there risks to my brand? Will I end up paying for sales that otherwise would have been acquired more cost-effectively? What kinds of customers will affiliates send me? These are questions that matter not friends. What matters is sales - and they're risk free. THIS was the promise.

Networks have a financial DIS-incentive to do anything other than pump sales through the network without regard for tactics being used by affiliates or more cost-effective strategies for their clients. Affiliate networks only gain when affiliates make a sale... and affiliates have done a fine job of arbitraging what sloth-like marketers have been too lazy to figure out for themselves. Google has been happy to collect a toll and let affiliates drive up the cost of brand-related advertising terms... the most lucrative of all for Google and the affiliate.

Shoppers navigate via Google and affiliates understand that. Marketers are just now beginning to realize it and taking their trademarks off the table. Duh!

Concurrently, Google has realized that marketers will, some day soon, smell the coffee and actually spend money on advertising with them. Google also realizes that users love them due to their ability to be so doggone relevant. Hence, Florida and such. Good for relevancy, bad for affiliates who engage in "browser spam" and tactics to trick our friends at Google with algorithmic voodo.

Gosh... which is it, relevant information or money from selling clicks to opportunistic affiliates? Google finds itself in a tough spot to balance both.

[Master Mind]

Google's Adsens makes it possible for just about everyone who wants to get into affiliate marketing to make a profit.

Build a simple content page, plug in adsense banner, get some traffic, get 10 to 20 click thrus/day on the adsense links, make $1/day plus.

Make a $100 per month and you get a check every month.

No worries about making sales - the risk of the sales is on the merchants.

Merchants are forced to pay up. How sweet it is? Just like in every other form of media.

The CPA networks are all going to die a slow death. When Billy gets MSN Search operational, they will do an Adsense type deal. AOL is working on the same thing.

If you want people to find you in a search engine, you are going to have to pay for it. There will still be FREE listings, but they will be well down the list and take a back seat to paid listings.

It's going to be just like the phone book.

Yahoo has blown up free search with their latest deal that is paid inclusion plus a per click fee.

It's almost like real business in the real world.

The ideal profit making website will be a single page with specific content info with outlinks of Adsense and a search box that pays per search and a link to a PROVEN sales making, parasite free CPA merchant.

The outcome will be that there will be millions of people making a small amount of money and actually getting a check and very few 'super affiliates.'

Practically anyone who is willing to work at it will be able to make an extra $1,000 per month.

The keys will be site branding, both online and offline.

Keyword specific directories will be highly profitable if the traffic factor is decent. An example would be something along the lines of the 'Expanded Classified Section' in USA Today.

If you can get 30,000 visitors per month to any page, gross income will be in the $1,500 range. Profit margins could approach Microsoft levels.

It's going to be fun

[Tubby]

Master Mind said
"If you can get 30,000 visitors per month to any page, gross income will be in the $1,500 range. Profit margins could approach Microsoft levels."

Well, I think this statement is wrong,
<comment edited by Catalyst>

[jeffmolander]

<comments deleted by Catalyst>

Master Mind... you are so dead-on right it scared Tubby half to death.

:)