Pay per click (PPC) and affiliates

As the costs of clicks drifts upwards for PPC and the resource time (i.e. cost) of managing increasingly complex PPC campaigns, with increasing numbers of more refined search phrases, also increases, I'm hearing of more and more merchants who are deciding not to bother at all with PPC (and, sometimes, 'organic' SEO) in favour of leaving it up to their affiliates to bear the risk, and effort, involved.

It does seem to make sense - why risk bidding against your own affiliates, or why take on any risk and effort at all, if you can just pay an affiliate a commission on resulting sales? You don't then have to worry about all this complex, time and money-consuming SEM..?

I'd argue that organic SEO work is still very important for the merchant, and some tactical use of PPC to meet ad hoc needs (e.g. promotional micro-sites) or plug certain holes, is still required. But what do others think about this apparent increasing reliance on affiliates effectively to manage SEM for merchants? It seems to throw up an intriguingly grey area between what an SEM agency would do for you and what an affiliate does for you?

My other observation in relation to this is the growing tide of user complaints we hear about search results being dominated by affiliates (including the likes of Kelkoo). This might, in part, be due to the above trend. It is also, no doubt, due to those affiliates expending enormous efforts on their own SEM as their ability to draw traffic and refer it on *is* their business - no rankings = no business.

However, given that search engines in turn need searchers to have a business they cannot afford to continue to frustrate searchers with results perceived to be poor. So might they strip, or deprioritise, affiliate sites from their results in the future? I don't see why not. In its simplest form I imagine the spider could report to the central index whether a particular site appears to take transactions or not (e.g. by looking for https) and then prioritise that site for relevant product searches over another site that does not appear to take transactions (and might, therefore, be just an affiliate).

Could it then be that merchants will rely on affiliates increasingly until one day those affiliates suddenly disappear from the natural search rankings? It's certainly a further argument not to postpone work on your own organic SEO.

Oh and one final thing, who is best to run your PPC for you..? A few thoughts:

1. DIY - good fun for a while, cost effective, soon becomes to much work to manage in-house..?

2. Affiliates - let them do it for you and just pay them on resulting sales so outsource the risk completely?

3. Media buying agency - it is buying ads after all and isn't rocket science... but do these guys really understand how to get the most for you..?

4. Specialist SEM agency - they really know this stuff and can also make sure that natural SEO and PPC are managed holistically?

My impression is that at the moment most people are doing a bit of 1 and 4 above, a small minority (retail, financial services, gambling) have done more of 2, and quite a few are wondering where 3 is going to come into play.

Anyways, that's enough SEM thoughts for the day. Any feedback welcome.

Ashley

Hi Julie

SEM = Search Engine Marketing and SEO = Search Engine Optimisation. It's all about how you use search engines to help drive relevant traffic to your site. As with anything new, and fast evolving, there is indeed a lot of changing terminology and TLAs (three letter acronymns) to keep up with...

For guides / tutorials and the like I'd suggest searching our directory of white papers and reports e.g. http://www.e-consultancy.com/knowledge/whitepapers/Default.asp?keywords=SEM&search_type=all&srch_date=99999&cost=free&source=econsultancy&action=searchKbase&srch_cc=0

Ashley

On 06:08:05 1 March 2004 Julie Brown wrote:
>SEM and organic SEO ?????
>Do remember there are folk on the first or second
>rung of the e-commerce ladder ! Julie,,, The Winchester
>Diet

For what it is worth, I allow affiliates to do PPC but not on our name or trade mark.. If you do take this route, you need to give your affiliates clear instructions as to what they can and cant do. We have a lot of affiliates bidding on product specific and it works well. Having said as much, we have employed our own SEO guru and we pay him on results just like our affiliates.

Jess :)

Lol, infamy!

I think I need to state that my beliefs can be compromised when it comes to these kind of issues. First of all, I have to follow the guidelines as set by my employer, which does not always represent my personal opinion.

Actually I think we are in agreement for the most part.

But I have to say merchants do need to control this to avoid situations that may arise in the future as not all affiliates are PPC savvy or super affiliates, hence clear guidelines. Example: misleading the potential visitor becuase the affiliate does not really understand what the merchant is promoting. Classic example: Go to google.co.uk, search for sunglasses. On the left hand side..you will see
Sunglasses at 50% off
34 brands for 1000 different styles
Dior, D&G, Gucci, Persol, Prada etc
unitedshades.com
This is the link you go to... where is the 50% off
http://unitedshades.com/?source=goog&kw=sunglasses

Its misleading!

For the guys and girls that know what they are doing, of course let them get on with it!

In the case of interflora it is a clear case that they either just don’t understand or they understand and are complete control freaks. Instead of sitting down and discussing the problem have adopted the defensive heavy-handed approach, which has damaged their affiliate program and have thrown a mighty large chunk of revenue out with the bath water. How ever, there are affiliates who they themselves work in isolation and oblivious to the isssues and just promote them for the sake of having a well known brand name on their website. Until these affiliates come together as a collective, companies like Interflora will continue to give affiliate marketing in the UK a bad name.

:)

On 12:32:33 5 March 2004 TallTroll wrote:
>Hmmm, I was about to rip into you, Jess... then I realised
>who you are :)
>
>As far as the whole PPC / affiliates thing goes, it is a
>fine line to walk for anyone. Obviously, self-management
>is an option, and works well for small campaigns, or for
>really large corporations that can afford to invest in a
>full time member of staff to manage the campaign, but in
>general it's not a route I would recommend if PPC is a
>serious part of the marketing mix
>
>Affiliates do represent a good opportunity to outsource
>all the management and risk, going to a purely
>pay-for-performance model. I happen to know many of the
>super-affiliates, and most of them are at least adequate
>PPC managers. Some of them are amongst the most talented
>PPC managers in the world (but trust me, you can't afford
>to hire them directly). However, if you choose to rely
>heavily on affiliates, remember not to hack them off. Far
>too many merchants see the affiliate channel as a
>"fire and forget" thing, just provide a data
>feed, sign up some "technology affiliates"
>(otherwise known as "parasiteware" affiliates),
>and reverse as many payments as you think you can get away
>with. This is NOT a good long term strategy.
>
>Media buying agencies - I wouldn't touch them for PPC
>work. What they do, they do very well, but they see PPC
>space as just another ad inventory, and it isn't, not even
>close.
>
>Specialist SEM agencies - In many cases, this would
>represent the best choice. SEM / PPC agencies have good
>relationships with the PPC engines, lots of experience in
>keyword selection and bid management, and will spot click
>fraud more quickly than most other channels, and have more
>success having it fixed (ie clicks refunded), and should
>be able to advise you on how to protect yourself against
>it.
>
>I'd also like to address some of Jess' points
>
>>> I allow affiliates to do PPC but not on our name
>or trade mark.. If you do take this route, you need to
>give your affiliates clear instructions as to what they
>can and cant do.
>
>I personally think that if you are going to have
>affiliates, you should allow them as much freedom as
>possible. I do understand that disallowing PPC bids on
>trademarks could be necessary to protect brand values etc,
>but you should NOT go as far as Interflora for instance
>who seem to have all but forbidden their affiliates from
>mentioning "Interflora" or "flowers"
>in their online activities, including PPC campaigns AND
>their own (the affiliates) websites.
>
>I think that Jess' policy represents a good stab at
>finding a happy medium. I don't entirely agree with her
>stance, but I'm hard put to come up with a better idea

On 21:51:48 5 March 2006 GogoPertov wrote:

 

Try http://www.click-share.com

I am working with them from 6 mounts and have very good results with very high CPC.

They also provide text and products ads.