How Google Killed Affiliate Marketing

Rumor has it that eBay just bought the web 2.0 toolbar company StumbleUpon, which helps users stumble into new and interesting pages based on the votes of friends and others with similar interests. THE SAME DAY that rumor came out Google added a toolbar feature which recommends websites you might be interested in based on your recent search queries.

Competitive Intelligence & AdSense Funded Startups

Google's biggest advantage over their competitors may not even be the cheap computer cycles. It is probably consumer trust. StumbleUpon only had to raise $1.5 million in funding before being bought out, largely due to low cost structure, but also because they turned stumbles into unmarked ads, offered a sponsorship based model, and published AdSense ads on their site.

Google can buy out or clone any service that threatens their ad market and media dominance.

Asset Pricing & Public Relations

Since StumbleUpon was an AdSense publisher, Google saw their growth rate, and had better market data as to their value than eBay possibly could have. As soon as they started talking about sales, Google could make the best offer, or decide if it was just cheaper to clone something in-house, then overshadow competing news by adding the feature to the Google suite ahead of the buyout news.

Advertising leads to exposure, which leads to more exposure, which leads to market dominance. Now Google is recommending content. Maybe those same content sites chose to advertise with Google from time to time, or maybe they syndicate Google's ads and convert well. If you were Google, and you were recommending ads and content based on earnings wouldn't that lead to recommending biased content that converts?

Trademarks & the Sketchiness of Relevant Recommendations

Google maintains that they are legal with their keyword based ad targeting. Judges struggle with the cases:

"The large number of businesses and users affected by Google's AdWords program indicates that a significant public interest exists in determining whether the AdWords program violates trademark law," Fogel wrote in his decision.

Maybe they are legal, but when you get to content websites or contextually targeted ads you can't be certain why Google is displaying an ad. Is it site targeted? Page targeted? Geographically targeted? Automated based on a keyword and trademark in the page title, or personal character flaws, or conversion data?

Arbitraging Your Brand One Click at a Time

With pay per action ads Google turned the link into a virtually unmarked ad unit. They will likely control distribution based on how much revenue an ad makes Google. If you buy distribution from lead aggregators, and they buy Google CPA ads, their ads may be automatically targeted by Google against any media mentioning your company, at first you will think these aggregators are doing a great job, and you might even pay them a higher commission. But then you may start to notice fewer direct inquiries.

Upon further inspection some of these lead aggregators use domain names similar to your brand, like VillanovaU.com, and their ads appear on just about any content related to Villanova. Eventually you realize that you are best off brokering a deal directly with Google, so you do.

Introducing Google Tax

This is how Google will kill many mid market players and get a piece of the action for most large businesses. They will keep automating recommendations and arbitraging against your brands and trademarks until you decide to broker an ad deal directly with Google, and if you don't give Google a big enough cut they will just recommend an arbitrager, some high converting currently hot scam, or a competitor of some sort.

Affiliate marketers funded search and showed business the value of search before getting pushed around by ad quality scores. The lead aggregators will show businesses that they can just work directly with Google. Off the start the numbers will look great, and they will keep doing well until direct inquiries gradually decline as the Google Tax is applied.

I think Werty was the person who coined Google Tax, while he was between paintings, working on his garden.

Changing Business Models

So I am starting to be a bit more honest with myself about the lack of value of my current business model. My price point puts myself rather low on the value chain. As the field of SEO has grown and my share of voice has grown I have attracted far too many wankers. Many of my customers are amazing people (I have met, became friends with, and learned from many of them), but it only takes a few bad ones to sour my mood. And it isn't fair for my girlfriend to have to put up with me being pissed off at wankers. For example, in the last 5 minutes I just got the following:

a blog comment from Whaterver@hotmail.com, stating

Not the only SEO book on the planet, just check out Chapters. If your SEO book were so good, why would I have to drill down four pages in a Google search to find it? Crap

a phone call about from a customer (not my customer, someone else's) asking me about why her site designer and SEO were fighting and if there was some independent ethics verification body

a refund request complaining that my book was too good

and this comment from a prospective customer

if this book doesn't help me the way i want it (= dramatic increase in traffic as determined at my discretion --- what is my guarantee i'll get my money back?

This wanker exposure is not uncommon either. In spite of making my phone number and email address less accessible I typically get to enjoy about 10 to 20 wankers a day. Some I ignore, but even when I try to do that, these people still make my outlook on humanity and the human race a bit bleak.

The people buying PPC stuff are already looking to spend money, but many of the people who are attracted to SEO are attracted to it because they are lazy, want a free ride, and refuse to add any value to the world around them. This is exactly why the target market for a PPC book is so much nicer than the target market for an SEO Book.

As search gets more complex and changes faster (you could write a 500 page book on just AdWords, let alone organic search) my job is to push traditional marketing principals rather than SEO loopholes because that is less risky and delivers more real tangible long-term value. Also, it is hard to write a book that is fairly comprehensive, up to date, applicable to the spectrum of readers, and easy to understand. I am thinking I need to change my business model. Potential changes may include any of the following

  • selling nothing on this site (though I would still update my ebook for a while if I did this)

  • increasing price point to $299 to filter out many of the wankers
  • charging recurring fees to new customers
  • selling a recurring newsletter instead of an ebook

Not sure when I will change my business model, but the sooner the better. What would you do?

Buying Links for Underdeveloped Unremarkable Sites

If search engines already have a reason to trust your site then leveraging SEO may help you gain more exposure. However, if your conversion process is not smooth, search as an isolated marketing channel is rarely an effective long-term business model.

The Real Reason Google Doesn't Like Paid Links

Being a (Near) Monopoly is Expensive

The more I think about it the more I realize why Google doesn't like the various flavors of paid links. It has nothing to do with organic search relevancy. The problem is that Google wants to broker all ad deals, and many forms of paid links are more efficient than AdWords is. If that news gets out, AdWords and Google crumble.
DoubleClick was the wrong model until Google bought them. But smart marketers are not trying to waste millions of dollars on overpriced brand ads.

Google Doesn't Sell Social Ads

If you are buying ads on Google you are trying to reach everyone searching for a keyword. If you buy contextual ads you are trusting relevancy matching algorithms. Those used to be the standard, but now there are far more efficient ways to reach early adopters. Social influence is far more important than most people give it credit for.

Content as Ads & Cheap Social Ads

People game Digg, draft stories for specific trusted editors, suggest stories to popular blogs, buy reviews on blogs, create products or ideas with marketing baked in, link nepotistically, etc. There are a lot of cheap and affordable ways to reach early adopters.

Editorial and social relationships have far more value than Google realize, and Matt Cutts's recent outbursts are just a hint at how Google is losing their dominant control over the web. And they deserve to, because...

The Web Doesn't Want to be Controlled

Sure Google likes link baiting today, but that is the next paid link. Google is backing themselves into a corner, destroying each signal of quality they once trusted, until one day the web is a piece of junk or Google is no longer relevant.

Dirty Ideas & Clean Link Sources

Ideas come up in the news over and over again, and when they do category leading sites gain self reinforcing links. In industries where many competing sites are viewed as sleazy it is easy to build an industry leading site by playing the industry from the other side. DMOZ loves to list Allegedly Unethical Firms, and so does the media. I just bought a domain name off SnapNames for the $60 minimum. Other bidders must have thought it was worthless because the name matched a scam. It does, but if I create an advocacy website then I have a self reinforcing authority that is a clean link source which can branch out in scope as it gains authority.

Every market and every idea is something you can build up or arbitrage against. Sometimes arbitraging against a scam helps reinforce the feeling of self worth in a group of powerful people. As long as you are comfortable with the position, don't be afraid to bet (and build) against scams.

Flat Rate Paid Inclusion: Yahoo! Search Submit Basic Returns

Not talked about much, but my partner noticed Yahoo! once again shifted paid inclusion to a yearly flat rate.

While Search Submit Pro allows you to have more control over listings and is sold on a costs a per click basis, their Search Submit Basic allows you to submit URLs for $49 per year per URL.

In the past Search Submit Basic was called Search Submit Express. It charged a flat inclusion price and sold clicks on CPC basis. Here is an Archive.org link to the old program.

If you have launched a new site and are not getting much Yahoo! traffic, submitting a few of your highest value pages is a good call. If you have key deep high value pages that are not staying indexed in Yahoo! this program also makes sense.

The Value of Blogging & Editorial Content in a New Market

If you wanted to enter a new market one of the easiest ways to get ready to enter it is to start a blog or editorial content site about the topic. An editorial site has the following advantages over a straight commercial site

  • It is easier to link at an informational site. There is a huge pool of links open to bloggers that is not open to purely commercial sites. There are people out there who WILL NOT link to commercial sites but will link to content sites.

  • It is also easier to trust a commentator as an unbiased industry source than a person building a new company.
  • If you write things that are link worthy they will spread much more quickly than if they were hidden away deep inside a commercial site.
  • When you write you create connections and gain exposure and trust, all of which can be leveraged to help push your ideas or get feedback on your ideas.
  • If you seem like a fan of your topic it is far easier to access people with competing business interests, before they even think of you as competition.
  • By studying and tracking a topic without committing to any business model, you learn the topic and then can build a business around opportunity.

The Failure of Small Chunks

A couple friends recently recommended watching Idiocracy. It is equally funny and disturbing, especially when you consider how our media consumption habits have shifted. Small isolated chunks pretend to be valuable information, but when placed outside of useful context, typically in ordered lists of factoids, they have much more marketing pull than they have actionable value. Some of my better posts go without comment, while some of my lists get thousands of backlinks.

Some people have hundreds, thousands, or hundreds of thousands of readers. Some people have millions of inbound links or MySpace friends. Virtually all of it is recycled content and recycled marketing in a fight for mindshare. The struggle for marketing anything beyond thinly disguised self promotion is to be able to add context, all while time starved people learn to hate and reject it, as they rush off to blog the same story before you do.

Kurt Vonnegut Died

Although I don't read as much literature as I would like to, I have enjoyed Kurt Vonnegut's writing a few times. Cory Doctorow mentioned his passing. Kurt was interviewed here, here, here, here, here, and here.

Use Google AdWords & AdSense Distribution Data to Broker Direct Ad Deals

Via Marketing Pilgrim, Google now offers a Placement Performance report, which shows what pages and sites your content ads are displayed on, and which ones are converting. Here are tips Google offers on how to use this data:

  • If your goal is to increase conversions such as purchases, page views, sign-ups or leads through your ads, reassess how you're tracking your conversions. Make sure you've implemented conversion tracking so you can understand how individual sites are converting for you. Please note: A low CTR reading on a site does not mean your ads are not performing well. This is because users behave differently on content pages than they do on search sites.

  • Use the site exclusion tool to exclude sites that are not converting for your campaign.
    Refine your targeting. If you find that your ads are not showing up on sites with a particular theme that you do not find relevant, try using negative keywords

  • Adjust your bids. Enabling our content bidding feature will allow you to bid separately for the content network. Learn more.
  • Identify sites that are converting particularly well for your campaign and take steps to increase your exposure on those sites. We recommend enabling our content bidding feature to bid more aggressively on those sites, or targeting them through a site-targeted campaign. Please note that site targeting utilizes cost-per-impression (CPM) bidding.

While those tips generally revolve around track your ads and spend more, they could be a bit more altruistic and useful. Thus, here are my tips on how I might use the data:

  • If you are using CPM site targeting on a large site, but find only a few pages convert, consider just targeting those few pages.

  • Find sources to buy ads from directly, and buy all their ad inventory. Maybe you can even broker a custom ad deal involving presell pages.
  • Find link sources...if they are already selling AdSense it doesn't take much more work to buy ads directly, especially if they are a smaller player and are not making much from AdSense.
  • View what TYPES of content converts and search for other content that matches that intent which you may want to advertise on.
  • View page content to see what keyword phrases the converting content covers. Create content covering the same keyword groups.

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