Google to Promote Affiliate Product Ads in Search Results

Jun 20th

Google Becomes an Affiliate

Blogoscoped scooped an email to a Google advertiser promoting Google Product Ads:

Product ads are paid product listings that appear when users search for products on Google. Through participation in the Google Affiliate Network product ads beta program, you can promote your products to users actively searching for your products and pay only when users make a purchase on your site.
...
Google product ads will feature product specific information directly in the ad such as price and product image. During the beta program, Google will be testing to identify the most effective ad formats. Google product ads will complement standard text ads on Google.com and will run independently during the beta.

And these ads could eventually create a near perfect marketplace. Google automatically targets the ads based on your Google Base feed. Either you are descriptive and give Google lots of information that they can commoditize, or you get limited exposure. And as far as pricing goes...

How are these ads ranked?
Ad Rank = Commission × Quality Score. The quality score takes into account the relevance of your product to the user’s query, conversion rate of the query and the matched product ad on Google, your account history, and other relevant factors.

Either you have the maximum visitor value and hand over the maximum profit share to Google or you get limited exposure.

And the ads will have more information in them than organic search results do:

Unlike text ads, product ads will “feature product specific information directly in the ad such as price and product image,” according to the email Google sent some advertisers inviting them to try out the ads this week. Google said that it would continue to work on the most effective format for the ads and that the ads would “complement standard text ads on Google.com.”

Search & Semantic Web Pulls Value From Domains

This move fits in with John Andrews' recent post Search Engines want to Eliminate Domain Names

We call developed domain names “assets” because we have difficulty accounting for that stored value. Accounting methods allow for “intangible assets” such as “intellectual property” and “good will”. If you build a successful site, you do it on a domain. When the site is no longer active, the domain retains a significant amount of “stored value” from the previous market success.

Search engines want to take back that stored value, or perhaps keep it for themselves. On many fronts, the domain name is in the way.

Could Google Open Up to Lead Generation Markets?

Google also launched a click to find out what's here option. When you think of how they carved out a dominant position in the map market, how they have aggressively pushed maps into the search results (even for some queries that lack local modifiers), and how they have merchants upload product feeds, what is to prevent Google from offering inventory data and hotel booking experiences right in Google's search results?

Seedy & scammy offers will continue to be pushed through AdWords/AdSense so Google can keep an arm's length distance from liability, but what happens to the CPA affiliate market (and small affiliate networks and thin affiliate sites) when the #1 lead source for most legitimate merchants is Google.com?

  • Will they force brands to pay for leads that are already driven based on brand?
  • Can they push the "organic" results down far enough to make the CPA option more appealing to merchants?
  • What lead channel could possibly be anywhere near as clean as the #1 search engine (especially when the search engine basically acts in the role of direct navigation)?
  • If this is successful will it kill many affiliate networks? Might that give Google more room to lower AdSense partner payouts?
  • If they are too aggressive with ad integration might they drive searchers to Bing or Bleko?

Twitter Looking at Ecommerce Too

A Twitter board member confirmed commerce is going to be part of the Twitter revenue strategy as well:

“Commerce-based search businesses monetize extremely well, and if someone says, ‘What treadmill should I buy?’ you as the treadmill company want to be there,” [Todd] Chaffee said. “As people use Twitter to get trusted recommendations from friends and followers on what to buy, e-commerce navigation and payments will certainly play a role in Twitter monetization.”

I could only imagine that those relationships will be affiliate driven.

Legitimizing Affiliate Marketing

Generally central networks have taken a dim view of affiliate marketing because it competes with their business model, but once they become themselves that will surely go away. Yahoo! already has a lot of affiliate relationships. Google's test is only a beta, but even if it fails they will try something similar again. They have to keep evolving their model to keep growing revenues.

Published: June 20, 2009

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Comments

June 20, 2009 - 8:13pm

This is just another way for them to extract money from you on searches for your brand. Likely what will happen is if YOU don't put your feed in for them to use as an affiliate, they'll slot your feed-happy competitor in. Use it or lose it...

June 21, 2009 - 7:19am

hey Aaron,

Funny thing this, but I'm not at all surprised. I actually suggested this was likely where Google was going, about 8 months ago. And then the first shot across the bow came earlier this month, with them telling Amazon that they're going to fight them for ebook sales.

Some choice excerpts to influence you to read that piece:

"1) Google will offer sort-by-price options for popular products, eliminating many thin affiliate sites."

"2) Merchandising will need to integrate more closely with SEO in order to feature more cheap products and expensive products where G’bot can access it."

"4) The organic search results for obviously commercial searches will be dominated by Google Base products."

"5) In turn, the margins for internet retailers will become thinner as Google progressively steals marketshare and people just use Google as their default product search. Call it Froogle 2.0."

Thought you might find that reading interesting :).

Besides that, I want to be the first to screenshot

- Buy Generic Viagra from Google
- Google Money Tree, now from Google

Oh and finally, I think I commented on Sphinn or wrote somewhere that spam websites didn't provide such a bad user experience if they ended up sending converting traffic to merchants. Ironically, Google is now finally openly recognizing that as a quality score metric. Perhaps more pressure to use GA and their other services?...

June 21, 2009 - 3:04pm

Search Engines (and Google is the best example of them) started eliminating domain names some time ago - first step was to devalue rank value of domain matches, so now one does not need nice domain to rank for important phrases, backlinks/anchor text play much more important role for that.

Furthermore even if you buy domain from someone else with good backlink profile then you won't be guaranteed that you will keep the rank - again search engines don't want you to do it.

Why so? Because creating this diversity people moved away from location bar to search bar - search engines want to be portals to get people reach sites via them, rather than directly by typing domain.

Domain industry is to blame too - it's pretty much darn impossible to find decent domain these days without paying huge money, so the only viable option is to get something unique and then CREATE your own keyword niche that is associated with you and owned by you.

June 22, 2009 - 12:34am

Yeah it will be interesting to see what tracking they get. Banner adds have much lower click rates but I'm sure being Google they will do it in a tasteful way to still get the clicks.
Domain names still are importing now. That may be changing, and it might not be as important as it onces one...but it definitey still helps.

June 23, 2009 - 3:05am

They won't look like traditional banner ads...they are much more likely to look like "helpful hints" or some such label.

June 22, 2009 - 11:03am

Ha, kinda funny thing came in my mind after reading this.

One last thing Larry & Page should now try is sign up for some good affiliate programs, create some ads … and instruct their software engineers to make sure their ads are always on the top… irrespective of Quality Score or whatever.

And finally wait for their checks to arrive in their mailbox.

He he he.

June 23, 2009 - 2:52pm

It's going to go way beyond this when the semantic web really kicks in.

http://buytaert.net/drupal-the-semantic-web-and-search

Here is another example. Imagine a standard Drupal node-type called 'job'. The fields in the job node-type would have RDF properties associated with them mapping to salary, duration, industry, location, and so on. Creating a new job posting on a Drupal site would generate RDFa that semantic search engines like Yahoo!'s SearchMonkey would pick up and the job would be included in their world-wide job database.

There'd be no need for Monster, HotJobs, Dice, etc..if you could do it all from the search engines.

June 23, 2009 - 7:01pm

IMHO there would still be a need for Monster, HotJobs, Dice, etc. because people still gather around brands, publishers like to be paid for their traffic, and paid services can afford to have editorial filters (even charging for listing is a strong filter because it puts an identity behind the listing and makes it non-free so it is less scalable to spam).

Anything that is built off a loose confederation of free 3rd party data which manages to gain significant exposure will be spammed to bits. Also would it be in Yahoo!'s financial interest to promote 3rd party content over HotJobs? Think of how they often promote their internal services via shortcuts & how they have a paid inclusion program for search. Plus if a 3rd party site creates a brand then they still would try to monetize it by layering paid ads and/or their own premium house content over the top of it.

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