This is part 2 of our 2 part series on the future of affiliate marketing to coincide with the panel on the topic at Affili@Syd which we, unfortunately, were unable to attend owing to flight cancellations. Rob wrote the first post which took a broad look across many areas of the industry with an eye towards the technical side. Here I (Murray) present my views with an eye towards the business side of things.
Does Google still matter to affiliates in 2011?
Google, and to a lesser extent Bing and Yahoo, are still the primary drivers of traffic to affiliate websites. To a certain extent some affiliates have managed to successfully leverage social networking platforms such as Facebook and Twitter. The tools provided to date by these platforms for small-scale advertisers are unfortunately still quite primitive compared to Adwords which has been (at the time of writing) more than a decade in development.
In recent years Google has taken a much harder line with various types of affiliate business models particularly (but not limited to) those it regards as engaging in the following activities:
- Bridge pages
- Get rich quick Schemes
- Mirroring and framing
- Misleading and inaccurate claims
- Information harvesting
Affiliates deemed by Google to have been engaging in some of these practices have for the most part been given the opportunity to improve their “site quality”. Others, however, who had promoted get-rich-quick schemes (common on lower quality networks), made-for-Adsense (MFA) sites as well as email address harvesting sites (give me your email address and you could win $500 worth of free dog food and a lifetime supply of spam), were banned from using Adwords altogether unless they “changed their business models”. The infamous “Google Slap” was beefed up by the folks at Mountain View into a killer blow with an algorithmic baseball bat.
Consequently many affiliates found themselves booted off the Adwords platform and were forced to find alternative sources of traffic in order to make a living. Some of these included the Bing/Yahoo alliance (and other smaller search engines), social networks, display advertising and the adware/spyware-driven pay per view traffic (PPV).
It has been suggested by many people in the performance marketing industry that “Google hates affiliates” or that Google has “declared war” on affiliates. In our experience this is not the case. It is, however, probably fair to say that Google hates lazy affiliates but tolerates hard-working ones with approved business models. As regards affiliates engaging in models, practices and techniques of which it disapproves, a “war” is not an entirely inaccurate descriptor.
The announcment of a new landing page “quality score” system in late 2005 almost went by unnoticed. Like an unmanned drone dispatched late at night to spy on its enemies, a new landing page quality score bot was unleashed upon unsuspecting Adwords user’s websites. Within hours a machine-driven algorithmic judgement on “landing page quality” was handed down upon tens of thousands of affiliate websites. Suffice it to say, the “Google Gods” were displeased with what they found and apparently not in a forgiving mood. Thousands of webmasters were slapped overnight with $10 minimum bids across the board and, for all practical purposes, banned from the platform. Compelling “victim impact statements” lodged to Adwords support the next day by affiliates hit by the slap were simply brushed aside.
Advertisers were shocked and dismayed to discover that this wasn’t an algorithmic glitch or a bungled roll out of the new bot. It was part of a carefully planned strategy to aggressively weed out lower quality sites and had the full approval of the company founders Larry Page and Sergei Brin. These events of December 2005 were the opening salvo in a highly systematic and and increasing sophisticated campaign Google has waged since then against so-called “thin” affiliates who in their view deliver “a poor user experience” with little value-added original content.
These events kicked off a reaction among many affiliates not entirely dissimilar to the one outlined by Elizabeth Kübler-Ross who detailed what people experience when they told they are about to die. Commencing with denial: “It’s surely just a temporary technical/algorithmic glitch“. Through to anger: “Why me? I spend 6 figures a month on Adwords. God damn it they owe me!” Through to bargaining: “Please just tell me what I did wrong? I promise to be good.” Followed by depression: “Looks like it’s game over for me”. And ultimately acceptance: “Hmm, is there life after Google?”.
Many thousands of affiliates and unsuspecting webmasters were totally wiped out by minimum bids of $10 and simply surrendered. Other more savvy affiliates were eventually able to pick themselves up, dust themselves off and slowly recover from the quality score bot carnage by registering new domain names and adding new content such as reviews, articles and price comparisons. Since 2005 Google has not relented and has continuously raised the bar for affiliates seeking to use their platform.
These developments have meant that Adwords then (and Adwords today) is simply no longer an option for large numbers of “ma and pa kettle” wanna-be performance marketers looking to supplement the income from their day jobs. The official line from Google is that quality score is primarily designed to improve the overall relevance of search results for Google users and also to improve the ROI for advertisers. People who can’t devote the time, resources and energy or who don’t possess the know-how to improve their quality scores are now simply forced to find other sources of traffic or give up all together.
For those affiliates, however, who have been able to satisfy the Google landing page algorithms the introduction of landing page quality score has actually proven to be a positive step in some respects. This is because it has reduced competition from other less savvy affiliates who had been driving up the costs of keyword auctions with MFA sites and thin “bridge pages” which linked directly to merchants.
Is the “bridge page” affiliate model dead?
For affiliates for whom search engine marketing is an important traffic source, content is critical. Content can draw people to a site and keep them coming back regularly for updates. The Google search algorithm loves high quality original content – even more so now after the recent panda update. Content often takes the form of user reviews, price comparisons, articles and blogs. It is no longer sufficient for affiliates to quickly knock up so-called “bridge” landing pages to send traffic to merchants. The search engines have progressively made these kinds of pages impossible to advertise on paid search and have taken steps to remove them from organic search.
Quality though can be a double edged sword for affiliates. Generally the primary goal of an affiliate’s website is to send highly-targeted traffic to a merchant’s site so that the traffic can convert to sales and leads for which the affiliate receives commission. If, however, the affiliate has built an outstandingly content-rich site it may be the case that users have too much choice of what to do and either get confused or consume the content and leave without clicking through to a merchant. In reality the best click through rates are often obtained with thin bridge pages containing a single, large “click here now” button to send users through to a merchant. Consequently affiliates need to find the a balance between building sites with loads of quality content to satisfy the search engines whilst still providing plenty of easy exit links to merchants so they can monetize the traffic. It comes back to the business model as well. Are you trying to send as many people through to merchants as quickly as possible on their first visit or are you trying to build an audience that will convert later without a continuous ad expense to keep attracting them back? Juggling both of those requirements can be difficult.
Is the future mobile?
Mobile is without doubt going to be a vitally important component of eCommerce and affiliate marketing in the years ahead with the sales of Smart Phones predicted to exceed the sales of PCs. In 2011 the percentage of mobile users who purchased something via their mobile devices was 13%. In addition to making mobile-friendly landing pages affiliates will need to consider if their niche lends itself to the development of a mobile application. If it does it could open the door to copious amounts of quality free traffic. Although the development of a smart phone app is a much more demanding process technically for traditional affiliate marketers, if it is well designed and marketed it can provide a massive source of new traffic to generate qualified leads and sales.
Ideally affiliates should develop a traditional site optimised for a PC, a mobile site for smart phones and tablets as well as a mobile app. Such a strategy would future-proof an affiliate’s traffic sources; however, it runs the risk of diverting time and attention away from the affiliate’s traditional means of acquiring traffic (ie. the standard website optimised for a PC) which may still deliver a better ROI for the time and money invested. As an interim measure affiliates should at the very least start to track traffic and conversions from mobile devices and tablets separately from traditional PCs and Laptops and build up a profile and knowledgebase of their mobile traffic so that they can make informed decisions about whether it is in their interests to invest time and money in optimising their sites for the mobile platform.
What kind of analytics tools are useful for affiliates?
We believe that high quality landing pages, built to appease an increasingly fastidious Google algorithm, combined with the use of third party analytics tools such as Google Analytics as well as a new breed of specialist affiliate-friendly apps likes Afflclicks are going to provide the most profitable outcomes for affiliates in the long run. The concept for Affclicks arose after many years of running performance marketing campaigns virtually blind. We realised that Google Adwords’ conversion tools were exclusively geared towards the requirements of eCommerce merchants with no options available for affiliates to measure how effective their PPC activity is at a granular level once a site visitor has clicked through to a merchant – other than through tedious manual correlation of IP addresses which is so time consuming as to be completely impractical. Other products we sampled either proved to be ineffective in terms of gathering the required PPC and commission data to effectively determine profitability or were geared towards agencies and were cost prohibitive.
Affclicks has been designed to help affiliates invest their hard-earned in the areas of their business that drive revenue and profits and cut their costs on activities that are not delivering a solid ROI. The primary focus of the application to date has been PPC keyword and adgroup performance analysis. However the application has recently been expanded to encompass organic search data analysis. There are plans afoot to increase the scope of the application even further to include landing page and ad creative performance analysis. Common tasks such as the pausing of unprofitable keywords will be automated and/or semi-automated via sophisticated user-defined business rules and will take much of the grunt work out of maintaining large PPC campaigns. If in spite all of the barriers to entry Google has erected, your site makes the grade in terms of quality score, Affclicks can help you tweak and fine tune your PPC campaigns to perfection squeezing the maximum possible ROI from the platform.