Tuesday, February 23, 2016

Google's big changes mean you should review your affiliate PPC strategy

A big piece of news this week is Google dropping right rail ads for desktop and moving to sit above the organic results only. In a bit I’m going to explain why this means brands should re-visit their affiliate tactics.

In addition, for some competitive query there may be as many as four PPC ads at the top of the page.

As you might imagine there been plenty of discussion about this. Clients want to know what this means for PPC campaigns. Agencies are sharing their viewpoints. Rightly so.

I’m not going to use this blog post to dig into the PPC discussion. The summaries agencies and pundits are producing pretty much agree; competition for fewer spots means higher prices so the usual tactics of finding out exactly which keywords to target and refine are even more important. The main disagreement from agencies seems to be whether this is a good, long term, decision that helps align desktop with mobile, or a bad idea.

There’s also been chat about what this means for SEO. It’ll certainly influence clickthrough rates for organic positions. The more expensive the PPC and the harder it is to appear on the first page means that SEO success becomes even more attractive. It may also be the case that for some queries there’s above the fold real estate for organic results. Overall; let’s call this a score draw for SEO.

Google’s own advice to websites is not to load the top of the page with ads. Let the jokes fly.

I’m yet to see much discussion on what the changes mean to affiliate marketing. I think, for some brands, this change represents a huge opportunity and therefore a challenge.

The default affiliate strategy these days is not to allow affiliates to bid on brand terms, on related terms or straight through to the merchant’s site. Affiliates have to build their own niche sites, that aren’t anything like a merchant’s site, and look for matching niche keywords to bid on. Coupons and voucher codes grew from niches into a huge industry.

There are other strategies though.

Search term domination
Affiliates can be used by brands to dominate the PPC results. Imagine you’ve a brand and two affiliates, driving traffic to allied sites, bidding on key brand hybrid terms. In Google’s old PPC landscape that wouldn’t have filled up all the paid search results. In the new PPC landscape that could (add one extra affiliate to make sure).

Further supporting this approach is the news that Google will shutdown Google Compare in a month. This removes one of the ways competitors could get some of their financial products in through your PPC wall of domination.

Cost optimisation
This is very much in the test and learn category. Usually, an analysis of whether it makes sense to let affiliates bid on key terms (especially brand or brand hybrid) comes to conclusion that it is not cost effective. Letting the affiliates in simply increases the action in the auction and therefore pushes prices up.

Will this be the case in the new limited space auction? It might be that the bid prices competitors are coming in with are above that of affiliates. If so then letting affiliates in won’t affect your bid price, if you’re determined to have a winning placement, but might act as a secondary catchment.

Performance PPC
On the far end of the ‘cost optimisation’ model is to run a brand’s PPC campaign entirely as a performance model/affiliate deal with an agency. The agency is paid a commission based on profit rather than a management fee.

Performance deals tend to be most popular with brands when it is hard for them to run a profitable PPC campaign in-house and when it doesn’t make sense to look for economies of scale by awarding a media agency combined PPC, display and other biddable media responsibilities.

If Google’s new PPC landscape makes it very hard to make a margin on PPC in some verticals then brands may well start to look around again for purely performance-based partnerships.

Double check brand bidding
By now, hopefully, most brands have a schedule for testing and re-testing whether brand bidding, along with core keywords, makes sense or whether the approach is just cannibalising PPC.

Google’s changes means that the testing schedule for this needs to be moved forwards. Competitors will be changing their strategy and affiliates, yours and theirs, will be changing their strategies. It’s a new world. Double check the basics.

What's your take on the new PPC world order? How do you think strategies will change?

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