Google Limits Affiliate Listings
Google said it would look for ads that direct to the same Internet address. If two or more direct to the same address, Google will display the one with the highest Ad Rank, which is the bid amount multiplied by the ad's click-through rate. All ads must direct to the Web address shown in the ad copy.
"We're really focused on our ad quality," said Salar Kamangar, product development director at Google. "An opportunity for improvement we've seen is there are cases we will show the same ad for the same URL. We're looking to reduce those cases."
The Mountain View, CA, search company said the policy change, slated to take effect later this month, would improve the user search experience by showing a more diverse set of listings rather than a repetitive list of similar ads from affiliates of the same merchant.
The policy applies to all ads directing to a Web address, even if the ad is from the merchant itself. Google exempts various storefront URLs, such as store.yahoo.com.
As part of the policy change, Google no longer requires affiliates to identify their ads as affiliate ads in the text. Often, paid listings on Google will include "aff" to comply with its policy that searchers know they are clicking on an affiliate ad.
Affiliates are a big presence in search. Merchants typically pay affiliates on a cost-per-acquisition basis. In turn, affiliates use various methods to acquire customers for merchants, often running cost-per-click ads on Google and Yahoo's Overture Services and making a profit on the difference between the click cost and the CPA reward.
"The affiliates who are doing arbitrage are going to be heavily impacted," said Kevin Lee, CEO of New York search marketing firm Did-it.com. "Their only choice is to stop doing it altogether or create landing pages that are sufficiently different."
Overture requires its advertisers to own the Web page to which ads are directed. It lets affiliates set up co-branded Web pages.
Google's new affiliate restrictions do not apply to affiliates that create separate landing pages. For example, a credit card company affiliate could set up a rate-comparison site to lure searchers who type in "MasterCard balance transfer."
"We do think they're going to continue to be an important part of our third-party ecosystem [in the future]," Kamangar said.
The new affiliate policy also will apply to content listings displayed on Google's AdSense publisher network. The policy will include multiple ad units running on an AdSense publisher's Web page.
Brian Morrissey covers online marketing and advertising, including e-mail marketing and paid search, for DM News and DMNews.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters