Brands can benefit from affiliate marketing

Affiliate marketing programs are commonly used by large and small companies as a low-risk means of obtaining new customers. However, some affiliate marketers have been plaguing search engine marketers for years. Google will serve only one ad per display URL, and the display URL must match the destination. So what happens when affiliate marketers pick up your offer and start using search to drive acquisition for you? Well, if the traffic is going directly to your site and they are complying with Google’s guidelines, then their ads are competing against yours for each and every impression.

Google’s position on affiliate activity has been that it is the advertiser’s decision to employ an affiliate program, so the responsibility to police affiliate activity falls on the advertiser. This raises an interesting question: With Google’s acquisition of DoubleClick, parent company of Performics, should and will Google change their position on this subject?

Why is this relevant? When your ad is competing against an affiliate ad, the one with the higher quality score wins, so a bidding

war begins for visibility. As a result, costs per click increase and the advertiser is the loser. Typically, affiliates who use search focus their attack on brand terms and have been known to use devious tactics to fly under the advertiser’s radar. Common tactics include mimicking the direct advertiser’s ad text, running geo-targeted campaigns in states outside of the advertiser’s locale and dayparting ads to show during non-business hours.

Sounds terrible, right? The fact of the matter is that most affiliates operate great campaigns driving quality new business for advertisers. It will be interesting to see how Google handles this acquisition and what it means for advertisers, search-engine marketing agencies, Google users and Google itself. This is a great opportunity for Google to help their advertisers properly use multiple channels. While average costs per click may decline in some cases, a properly regulated program would allow all parties to win out.

What can advertisers do in the meantime? Do not be afraid of affiliate programs. Enact an Affiliate Rules of Engagement that prohibits using paid search as a channel. Watch impression volume on your brand terms. If you see a decline, start investigating. Pause your brand terms in your search campaign, and see if a sponsored link that is not yours shows for your Web site. If you see an affiliate violating your rules of engagement, warn them once. Assure them one more offense will be the last.

 (This article first appeared in the June 2007 edition of the Essential Guide to Search Engine Marketing.)

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