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Image via CrunchBase
A couple of years ago, I wrote about the "Search Engine Tug of War" between merchants and affiliates, and the basics haven't changed much since I wrote that article. But more and more companies running affiliate marketing programs are changing their policies on paid search. Recently, the granddaddy of all affiliate marketing programs, Amazon Associates, announced that they are curtailing some of their payments for paid search.
The basis for this battle is quite simple. Merchants want the extra sales that affiliates provide, but they want them at the lowest possible cost, provoking a constant skirmish over what practices add new sales versus raise the price for sales that would have happened anyway.
Some merchants, including Amazon, have long prohibited affiliates from bidding on the merchant's brand name. The theory behind this practice is that those searchers already want to buy from the merchant, so the affiliate provides no value by intercepting that traffic and then graciously feeding it to the merchant. Had the middleman not been present, the theory goes that the searcher would have clicked on the merchant directly, saving the merchant those pesky affiliate fees.
But, as I pointed out in my article from 2006, some merchants found that removing their affiliates from the mix merely provided competitors with "shelf space" that stole the sales completely. Some merchants prefer to pay the affiliate fees to freeze out competitors rather than partners.
Amazon's most recent change in policy is on a different issue--directing searchers to Amazon's own pages from the paid search ad. Many merchants have always prohibited this practice, believing that the ability to bid and write ad copy alone is not worth a commission, but Amazon until now had been lenient.
Amazon now insists that affiliates direct searchers to ads on their own site and then direct to Amazon, which changes the equation in several ways:
Amazon took its sweet time announcing this practice--one which other merchants did years ago--so you can bet that they spent a lot of time agonizing over the numbers to see whether this helped or hurt their marketing. Now that Amazon has taken this stance, it's less likely that other merchants will be lenient on this practice.
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Mike is an expert in search marketing, search technology, publishing, Web personalization, and Web metrics, who regularly makes speaking appearances.
Mike's previous appearances include Search Engine Strategies, AD:TECH, Consumer Reports WebWatch, OMMA East, and the Enterprise Search Summit.
Mike also writes the Biznology newsletter and blog, is the co-author of the best-selling Search Engine Marketing, Inc., and writes the search marketing column for Revenue Magazine.
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