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Affiliate marketing exists on the crossroads of a number of online marketing channels. Paid search is one of the channels that many affiliate managers end up having trouble reconciling affiliate marketing with. Can the two co-exist in harmony, and if so, how do you achieve it? 

Today I am excited to bring you a Q&A with David Szetela, an online advertising expert, author, speaker and consultant, former CMO for Bionic Click and former Owner and CEO of Clix Marketing, a pay-per-click (PPC) advertising agency.

What are the major challenges with which you see your paid search clients struggle these days?

First, the competition has really heated up. It's tough to find an industry or business niche that is not rife with PPC advertisers. This has obviously forced click prices skyward.

Advertiser sophistication hasn't kept pace. So in many industries, PPC advertisers are jockeying for the top ad positions, seemingly without regard to ROI and profitability. It's not unusual to find, through keyword research or live testing, that the top positions are held by advertisers that can't possibly be turning a profit. they're either losing money intentionally, hoping to "make it up in volume," or they're simply unaware that they're bleeding dollars.

It's logical to think that the more clueless advertisers are the "little guys," but you'd be surprised. I've seen big companies and major retailers who make these kinds of mistakes.

Another challenge is the increased complexity of the ad platforms - Google AdWords and Microsoft adCenter. It's normal for software developers to evolve and compete by adding features. And in general Google and Microsoft have implemented ones that truly help advertisers - like automated bid management in AdWords.

But feature proliferation can make it tough for advertisers to keep up with changes, adapt to mandatory (but possibly detrimental) ones and take advantage of truly groundbreaking new ones.

For example, many advertisers are still unaware of Google's recent dramatic change to its Phrase and Exact keyword match types, or the switch from campaign-level to ad-group-level targeting for Display campaigns.

What are the most frequently overlooked opportunities?

I find that most - and I do mean most - PPC advertisers are still underutilizing PPC Display advertising. I think it's mainly a case of lack of education. Google has some good resources that aim to teach advertisers about display network targeting, bidding, etc., but they don't do a good enough job pointing out the differences between best practices for Search and Display. For example, their explanation about the role of display keywords is still confusing and possibly misleading.

Another opportunity that's frequently overlooked is the use of Google's automated bid management, which it calls Campaign Optimizer. It's built-in, free for all AdWords advertisers, and works very well. Though third-party alternatives like Acquisio can do a better job at managing Search bids, I believe Conversion Optimizer can't be beat for automating Display bidding.

One more opportunity: Facebook. I'd recommend it for any advertiser who's mastered Google and Microsoft PPC Display advertising. You'll need good Display skills for Facebook - for example, you should be able to design and write great Display ads. So don't dip your toe into Facebook until you're already successful at AdWords Display.

When it comes to affiliates marketing through PPC, I've found averages to be most dangerously misleading (as for example EPC). Give us 5 other metrics that shouldn't be taken at face value (and why).

  • CTR - because ads that get the most clicks don't always result in the best conversion rates.
  • Impression share - because many advertisers simply can't afford to display ads for more than 50-75% of the available search queries
  • View-through conversions - because some of the conversions would have happened without exposure to Google ads
  • Many-per-click conversions - because these should be ignored when the conversion type should be counted once - e.g. whitepaper downloads.
  • [not really a metric] Keyword Opportunities - accepting Google's suggestions will certainly increase your costs and decrease your CTRs - because Google suggests the wrong ad groups. Advice: export them all to CSV, hand-pick the most impactful, create new ad groups.

If a merchant is running their own paid search, and also has an affiliate program; what advice would you give them to ensure that the latter doesn't cannibalize but compliment the other?

  1. Police prohibited terms diligently - especially brand terms.
  2. Treat your affiliates fairly and let them know you value them.
  3. Keep them aware of new developments in PPC advertising - via a monthly email newsletter, for example. Give them examples of how they can use new features to maximize conversions.
  4. Encourage - beg for - feedback on how you can help them. Get regular data flowing in your direction regarding the performance of banner ads, for example.
Geno Prussakov

Published 14 September, 2012 by Geno Prussakov

Geno Prussakov is the Founder & Chair of Affiliate Management Days conference, Founder & CEO at AM Navigator, author, internationally known speaker, and a contributor to Econsultancy. You can find Geno on Google+

27 more posts from this author

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