Since Google announced the beta test of pay-per-action advertising – which allows advertisers to pay only when predetermined actions are completed on their Web sites – there’s been a lot of talk on how the PPA model might adversely affect the affiliate networks.
However, Holger Kamin, regional manager for the United States at Berlin-based Zanox, believes Google and the affiliate networks can and will co-exist.
“The affiliate market is completely different than simply PPC or PPA models,” Mr. Kamin said. “It is by no means obvious that Google will be a serious challenger here – or that it even wants to [be].”
The pay-per-action model gives advertisers the option of paying when a customer makes a purchase, signs up for a newsletter or completes any other clearly defined action the advertiser chooses. Advertisers have the freedom of defining the value of a completed action, ultimately giving them more control over their advertising costs.
Mr. Kamin said that Google’s PPA offering is a good deal for smaller publishers who are likely already using AdSense anyway.
“Larger advertisers and affiliates want much more control and support than Google is offering,” he said. “That’s where affiliate networks excel and are clearly superior.”
But making affiliate marketing victorious depends on more than just technology. It takes hard work and a hands-on approach and hands-on is not “Google’s style,” Mr. Kamin said.
Affiliate networks have developed tracking systems that cover the majority of possible scenarios and make sure partners and affiliates get paid for every qualified lead and sale.
“Another point here is the scalability of various channels called multi-channel marketing,” Mr. Kamin said. “The sophistication of today’s affiliate networks enables some players to manage all possible online marketing partnerships. This alone differs significantly from Google’s overall objectives. Here I see them indeed making a play for an affiliate network, not only to get the horizontal reach, but also to benefit from its overall know-how.”
