Google describes it thus:

Google acquired the DoubleClick Performics Affiliate operations in March 2008. Together, we’re creating new opportunities for monetization, expansion, and innovation in affiliate marketing.

Performics was founded as the first full-service affiliate network in 1998 and was acquired by DoubleClick in 2004. Today Performics Affiliate operates as Google Affiliate Network and remains committed to delivering affiliate channel growth for advertisers and publishers.

Google has been attempting to enter the affiliate marketing industry since early 2007. At the time Google launched its Referral Program within the Adsense network. This program offered lackluster results, and Google announced it will be closing the Adsense Referrals program soon.

Publishers have the option to replace the referral ad placements with traditional Adsense ads. Google is encouraging them to sign up for the new Google Affiliate Network.

It will be interesting to see how the Google search and Adwords platforms respond to the new Google Affiliate Network link technology. It is common knowledge in the affiliate marketing industry that Google penalizes naked affiliate links.

Uncloaked affiliate links will prevent affiliate pages from ranking well in the SERP’s. Google has been penalizing affiliate links, because it has stated that “thin affiliates” offer little value other than a “doorway page” to another site.

It is ironic that Google is now pushing a network of publishers who will be doing just that.

Google Adwords has also penalized affiliate landing pages with uncloaked affiliate links with its infamous “Quality Score” known to affiliate marketers as the Google Slap. This results in immediate bid requirements of $5 to $10 per click. The end result makes Adwords advertising impossible without using link cloaking and other methods.

 I will be watching and probably experimenting with whether Google will be applying their search and Adwords penalty to publishers using their own affiliate network. I ask all my readers the following important question.

Will Google’s enthusiasm for their new Affiliate Network skew their standard penalty against affiliates?

Feel free to let me know your thoughts on this question.

After Google’s acquisition of DoubleClick/Performics we have all been waiting to see how Google will deal with affiliates that are working “for them” and their advertisers. I digress…..now let’s take a look at the email.

Here is the exact email (don’t miss the bolded section):

Dear AdWords Advertiser,

We’d like to help you get the most out of your AdWords campaigns. We’re offering Google’s team of specialists to help with your AdWords account at no cost to you.

Tell us about your AdWords campaign and how you’d like it improved, and one of our specialists will create a detailed campaign proposal designed to meet your goals. This type of campaign optimization can include ideas for your keywords, ad text, campaign structure, bids, targeting settings, and more.

The goal of our optimization service is to improve your campaign performance and help you meet your advertising goals. You’ll stay in full control of your account and can accept or decline the campaign options we provide.

If you’re interested, all you have to do is request a campaign optimization. (Please note that this offer is not available for affiliate advertisers.)

Learn more about Google’s optimization service. You can also check out our optimization tips page at http://adwords.google.com/select/tips.html.

We look forward to hearing from you.

Sincerely,

The Google AdWords Team

I do have to point out that Google is now offering this feature about 18 months later than Yahoo. Yahoo has been offering to help me with my campaigns for over a year and believe it or not they don’t care that I am an affiliate. My money is as green as the next guy’s at Yahoo, but not at Google.

Affiliates should make it a point to support Yahoo and their recent affiliate friendly initiatives. At least one major player is showing respect to a method of marketing that predates Google itself…

Up until this announcement, it was Yahoo’s policy that you couldn’t send sponsored traffic to a site that you did not own, even if you had a working affiliate agreement with the merchant to do so. This policy has not always been implemented across the board; I have been able to get direct link ads up in YSM for years, but this policy would often rear its ugly head at the worst times, after all the work was done. Yahoo has shut down entire accounts of mine in the past in an effort to enforce this ill-advised policy. I am happy to announce they have come to their senses.

This represents a significant shift and CJ is bragging that they had a lot to do with this policy change. What role CJ has played is not clear, but they announce it as follows:

After more than six months in the making and much customer feedback and testing, we are pleased to announce that Yahoo! Search Marketing (YSM) has recently updated its editorial policies and will now allow U.S. publishers to direct link to their advertisers. In the past, YSM’s editorial policy prevented publishers from linking directly to their advertiser partners and required that traffic be sent first to the publisher’s Web site. The new policy eliminates this restriction and opens a much broader search marketing opportunity for publishers. 

This YSM policy change is the result of a strong relationship between Commission Junction and YSM. We have spent more than six months working with YSM to enact the new editorial policy and are very pleased that this effort has resulted in changes that are sure to create opportunities for our publishers and advertisers.

CJ will no doubt win big points for helping to make this happen. There are many affiliates who spend precious time building out landing pages or redirect systems to get around the old policy. This will certainly affect the way many PPC affiliates do business.

I never understood their old policy and how Yahoo could justify leaving so much money on the table. Only in a huge corporation could fear of legal actions, cause such an irrational policy.

Yahoo is now poised to woo Google-weary affiliates after numerous “quality guidelines” slaps against affiliates in the Adwords format. Many recent studies have shown the Google slaps have been a boon for small PPC marketing platforms, which have absorbed many affiliates looking to recoup lost traffic. Yahoo can now attract these advertisers with a more permissive policy than Google. Hopefully this will give them a competitive advantage, and show Google that they “slap” affiliates at their peril.

Let’s take a closer look at the deal being offered first. Microsoft’s press release states:

Microsoft Corp. (Nasdaq: MSFT) today announced that it has made a proposal to the Yahoo! Inc. (Nasdaq: YHOO) Board of Directors to acquire all the outstanding shares of Yahoo! common stock for per share consideration of $31 representing a total equity value of approximately $44.6 billion. Microsoft’s proposal would allow the Yahoo! shareholders to elect to receive cash or a fixed number of shares of Microsoft common stock, with the total consideration payable to Yahoo! shareholders consisting of one-half cash and one-half Microsoft common stock. The offer represents a 62 percent premium above the closing price of Yahoo! common stock on Jan. 31, 2008.

    “We have great respect for Yahoo!, and together we can offer an increasingly exciting set of solutions for consumers, publishers and advertisers while becoming better positioned to compete in the online services market,” said Steve Ballmer, chief executive officer of Microsoft. “We believe our combination will deliver superior value to our respective shareholders and better choice and innovation to our customers and industry
partners.”

    “Our lives, our businesses, and even our society have been
progressively transformed by the Web, and Yahoo! has played a pioneering role by building compelling, high-scale services and infrastructure,” said Ray Ozzie, chief software architect at Microsoft. “The combination of these two great teams would enable us to jointly deliver a broad range of new experiences to our customers that neither of us would have achieved on our
own.”

Let’s discuss how this all affects affiliate marketers. If this deal goes through it could decrease the competition within the search market, which is generally a bad thing in my mind. This means that the impact of one company’s change in policy could more severely damage affiliate marketers, as Google did with Google Slap #1 and Google Slap #2. No one knows if there will continue to be further slaps from Google.

That said, I would much rather see Microsoft purchasing Yahoo! Inc. than Google. At least there would still be 2 very large players in the search market. Microsoft would be able create a balance to the power of Google. Yahoo’s Publisher Network would enhance Microsoft’s attempts to expand it’s content network and technology.

One question that comes up on the practical side of things is whether Microsoft would attempt to consolidate it’s own search under the Yahoo brand or vice versa. Since Yahoo has a much larger market share than Microsoft, I imagine that would be the case. This makes less work for affiliate marketers who spend a good deal of time modifying campaigns for three separate search engines at present. The downside to this is increased competition within the PPC sphere driving costs up.

It still remains to be seen whether Yahoo! Inc. will take the unsolicited offer made by Microsoft, but they sure did try to make the deal pretty sweet! - a 62% premium on the current stock price will be a hard offer to decline. We will just have to wait and see.

“Pepperjam Network represents an evolution in affiliate marketing. The creation of Pepperjam Network represents eight years of research and development and the combined ideas, feedback, and intelligence of hundreds of affiliate marketers and advertisers. Pepperjam Network will forever change the face of affiliate marketing by putting power back in the hands of affiliates and advertisers to build long-term, profitable partnerships through better communication tools and transparency,” said Kristopher B. Jones, President & CEO of Pepperjam.

Among a variety of affiliate marketing enhancements, Pepperjam Network addresses the two primary shortcomings of other existing affiliate networks, namely (1) poor, unreliable communication tools and (2) lack of affiliate transparency. With Pepperjam Network, affiliates and advertisers can communicate in real-time via Pepperjam Chat™, thereby providing a reliable communication system to build stronger, more profitable partnerships. Pepperjam Network also provides advertisers with an unprecedented measure of affiliate transparency, which helps to establish trust, protect brand integrity, and lays the groundwork for open, long-term, profitable relationships. Pepperjam Network also introduces pepperjamADS, which is a first-ever affiliate marketing widget that affiliates can use to serve customized contextual ads from multiple Pepperjam Network advertisers at the same time. (read more)

I must admit I haven’t yet had time to sign up for the network, but I will certainly be doing so in the future. I will report back to the readers of this blog what I find in due time.

If you have signed up already and want to share your thoughts about this new affiliate network, then post a comment below.

Conversion of Campaigns to Other Formats

This is probably the best feature of Affiliate Radar to date. There has long been a need for a script that would automatically convert a CSV from the Adwords Editor format into YSM and MSN bulk uploading formats. The only problem is that both Yahoo and MSN have known this for a long time, and now they are both offering to convert them for you. Well, they claim to do it for you, but it doesn’t always work.

Yahoo’s conversion script certainly leaves the user wanting. In my experience the Yahoo conversion does not really work without assisting it with a lot of manual edits, thus making it useless. So there is a niche here for Affiliate Radar, which actually does a good job of converting CSV’s from Adwords into YSM and MSN formats.

MSN on the other hand just released this option and I haven’t had the chance to test it yet. It may be just like Yahoo’s or it may actually work.

I have tested this feature in Affiliate Radar and it works nicely. The upload into MSN adCenter went without a hitch, but you still have to set the campaign targeting and activate the ad groups manually, but that is not Affiliate Radar’s fault, it is MSN’s.

Apparently the most recent Adcenter update makes this possible in bulk. Meaning you can select all the new adgroups and activate them all at once, rather than one at a time. That in itself would be a huge improvement in the Adcenter platform, but I’ll believe it when I see it.

Reporting

The report functionality inside of Affiliate Radar was quite lacking for anyone running a significant amount of PPC campaigns. I thought someone had finally figured out a great way to track campaigns at the keyword level without requiring a vast installation of scripts on a server. It turns out that is doesn’t do all it claims to do, at least not yet.

The automatic generation of subid tracking for all of the major PPC engines is a great idea. This eliminates the need to generate unique tracking codes for each and every adgroup or for those meticulous people for each and every keyword.

Most affiliate marketers track on the adgroup level and not the keyword level, because it can become unmanageable to track every keyword. I bid on close to a million keywords. How am I supposed to track every single one? This is where Affiliate Radar is supposed to come in, and they largely do.

Once you upload a report from the affiliate network, AR quickly compiles a keyword report showing which keywords are converting and which ones are not. Awesome! I thought to myself until I looked for a place to upload my PPC report from Adwords. There was none. That is where my critique comes in.

It is nearly impossible to track and bid based on data that is generated purely from an affiliate network. The affiliate network data has to be reconciled with PPC network data. This is because there is always a discrepancy between the number of clicks an affiliate network will show in its reports and the number a clicks that are actually paid for.

Sometimes the affiliate network will report more clicks; sometimes they will report less clicks. This depends on which network you are talking about. But there is always a discrepancy, and if I am going to bid on EPC data that is reported it is the PPC network clicks that should be counted. This is for the very simple reason that: THESE ARE THE CLICKS YOU ACTUALLY PAID FOR!

You aren’t going to bid based on clicks that may or may not have actually happened. Most PPC networks filter clicks for fraud, and you usually pay for less clicks than you actually get. But in the game of PPC affiliate marketing it is the paid clicks that you want to account for. These are the clicks that you need an accurate EPC on. Not the clicks reported by the affiliate network.

So until Affiliate Radar adds the ability to reconcile reports from both ends: cost and commission; they will just be a nice way to convert Adwords files into YSM and MSN formats, which I have to admit, is probably worth the $97 per month, at least for the time being.

In a previous post about Linkshare’s new weekly payments I pointed out that CJ closes all transactions automatically within 10 - 20 days of the previous month’s end. This is a very affiliate friendly strategy and it ensures affiliates are paid more than 90% of their earnings 20 days from the previous month’s end.

In contrast, Linkshare allows their merchants 90 days to close and make payments on their transactions. That is 4 to 5 times longer than Commission Junction allows. This doesn’t mean any specific merchant can’t close them earlier, they can. But the fact that the default is 90 days is not very affiliate friendly. Merchants, just like affiliates, are very busy and don’t get around to things like closing transactions until they have to. As a result, affiliates are paid months late for their commissions. If you are an affiliate who runs PPC advertising, this can be devastating, because you have to carry your PPC bill and pay interest on it until the payments come in. The bottom line is, this eats into the profitability of any PPC affiliate.

I am going to share a snapshot of my experience with late paymets as of November 20, 2007 after 6 months as an affiliate with Linkshare. I feel this information is critical to affiliates and merchants considering doing business with Linkshare Corporation. I am doing this so any affiliate can fully understand what they are getting into if and when they join Linkshare.

As of November 20, 2007 I had not been paid out 69.2% of my commissions earned in September! That means almost 2 months later I have still not received the vast majority of commissions earned.

In contrast, at Commission Junction, I received 98.8% of my commissions earned in September on October 17, 2007 (over a month ago). Linkshare cannot compete with CJ as long as their payouts are untimely. This policy makes it clear to affiliates that Linkshare’s priorities are to please merchants and not its affiliate partners.

As of November 20, 2007 I still have outstanding, unpaid commissions that were earned in June, July, August, September and October. You would have to be the Buddha himself to have the patience to wait for these payments to be made!

The reality is, that many of them may never be made at all. Those in June and July are from merchants who left the Linkshare network without paying. Hence, Linkshare feels no need to pay me. Again another contractual arrangement made by Linkshare benefiting merchants and hurting affiliates.

I am sorry to report that even after the implementation of Linkshare’s weekly payment system, Linkshare’s payments to affiliates are Late, Late and Lacking.

Sponsored by buy.at, the UK’s largest independent affiliate network, the comprehensive research into how UK brands use affiliate marketing found that the majority of UK advertisers (merchants) say that it is either ‘very cost-effective’ or ‘quite cost-effective’ for acquiring customers. 44 per cent of merchants named it as ‘very cost-effective’ for driving customer acquisition compared with 34 per cent for paid search and just seven per cent for display advertising. (Release Date: 26 September 2007)

Internet marketing is changing the way people market their brands, because of the very detailed analytics allowed by marketing online. Advertisers are able to track their advertising spend in more detail than they ever could before. Every dollar can be tied to very specific returns. As more and more information and research is done, it is becoming clear that affiliate marketing is THE most cost effective way to market a business online for one very simple reason. It is performance based!

If an advertiser doesn’t get the volume or the sales expected they don’t have to pay a penny. They only pay when they get what they want. I am taking it for granted that an advertiser will know what they want. With customer acquisition it is very important for the advertiser to know the value of each customer and to pay affiliates appropriately, while making a strong profit.

Paying a percentage of sales makes things simple for smaller companies, because they already know their profit margin, and they just allocate a portion of that to affiliate sales. This is my preferred method of earning, because it is cut and dry. I generate $100,000 in sales. The commission rate is 10%. I earn $10,000. With this revenue sharing performance based marketing it is impossible for an advertiser to lose money. That is the beauty of affiliate marketing. A team of professional internet marketers who are only paid when they drive the conversions established by the merchant.

Performance based marketing is substantially more cost effective and safer than paid search. An advertiser could spend their entire marketing budget on search campaigns and not earn a penny if they don’t know what they are doing. This is why I advocate for outsourcing search engine marketing into the affiliate channel. This is a cost-effective way of doing paid search without any of the risk. If you are an advertiser with a closed search affiliate program, you don’t know what you are missing out on. Stop wasting your marketing budget on paid advertising and let the affiliates do it for you. It is safe, it is easy and according to this E-consultancy research it is “very cost-effective”. 

 It is no wonder that most advertisers are planning on increasing their spend in the affiliate marketing channel this year. They will continue to do so in years to come, as affiliate marketing establishes itself as the most cost-effective way of doing business online.

Unlike Commission Junction, Linkshare allows its advertisers to pay their affiliates directly or to pay through their system. This is problematic for an affiliate who manages hundreds of merchant relationships. Linkshare sends out its consolidated checks, but then specific merchants send out separate checks on their own schedule.

My main gripe with Linkshare payment system has been that they allow merchants 90 days to review each and every transaction before they are considered final and closed. Commission Junction on the other hand gives merchants 10 days after the end of each month to review transactions from the previous month. Only if a merchant is unable to verify a specific transaction within this time period are they allowed to “extend” the review period to 90 days. Both Linkshare and Commission Junction allow 90 day review periods but CJ defaults to the shorter period of 10 days, while Linkshare defaults to 90 days. Basically, CJ is more affiliate friendly than Linkshare. Linkshare is more merchant friendly.

Does this weekly payment system change all that? I see no indication that is does. Linkshare wins some points for trying to improve on one of their network weaknesses, but until they default to a shorter review period, I will prefer CJ’s payment system. I actual appreciate the once monthly payments CJ provides. They are easy to keep track of and I don’t feel like I am losing commissions I may have earned 3 months ago but don’t have time to keep track of. This problem is exacerbated by recent reporting outages at Linkshare that continue as of this date. 

Linkshare still has some work to do to make themselves more affiliate friendly. In the meantime CJ merchants will get more attention than they deserve because of the network they have chosen.

A bit of advice to Linkshare merchants: If you don’t want to move to CJ but you want to make your program affiliate friendly, then make sure you approve the previous month’s affiliate transactions within the first 10 days of the month. This effectively equalizes the issue, and perhaps even works in Linkshare’s favor because of the new weekly payment system.

Ads that are placed above the search results generate a much higher volume of clicks when compared to those placed on the right side of the search page. The clickthrough rate is also much higher if your ad takes the top position, but the conversion rate is not always as good. Top positions generate a lot of impulse clicks that are less likely to convert into a sale. Is Google planning on moving more people into the top positions? They describe the change as follows:

With this new formula, instead of considering your actual CPC, we’ll consider your maximum CPC bid, which you control. This means that your ad’s eligibility to be promoted is no longer dependent on the bids of advertisers below you. Therefore, if you have a high quality ad, you now have more control to achieve a top position by increasing your maximum CPC.

Your actual CPC will continue to be determined by the auction, but subject to a minimum price for top spots. The minimum price is based on the quality of your ad and is the minimum amount required for your ad to achieve top placement above Google search results. As always, the higher your ad’s quality, the less you will pay. And you will never be charged more than your maximum CPC bid. [read more]

The mention of “minimum price” says it all. Google is going to start setting a baseline max CPC for all ads that get listed in top positions. This is possibly as a result of the new information that Google now has access to with it’s recent purchase of DoubleClick/Performics. Many fear that as Google is able to follow each search all the way to the checkout process they will want to raise prices to compensate for those earning an extraordinary ROI. Could this be happening already?

It is not likely that they have already integrated conversion and ROI data into what they demand for click prices, but that situation might not be too far off. Click prices are going to continue to rise as they have for the last several years.