Google’s Is Now an Affiliate Marketing Network
In my opinion, Google’s new Pay-Per-Action (beta) signals an interesting mix of opportunities and problems for everyone involved in affiliate marketing. While not identified as such, Pay-Per-Action is really an affiliate program. This makes Google the newest and soon to be largest global affiliate marketing network.
Google describes Pay-Per-Action as a 3-step process of 1) creating ads and defining actions, 2) securing publishers who will display these ads, and 3) paying for completed actions. Google administers and tracks the process just like an affiliate marketing network. As Shawn Collins discussed today, Google’s affiliate marketing entry really isn’t new since AdSense is really a pay per click affiliate program. I agree, however, Pay-Per-Action moves Google from merely having a PPC affiliate program to being an affiliate marketing network. This is a huge shift, in my opinion, and one that should concern everyone.
Above I said there were both opportunities and problems with this move. I’m not yet sure what opportunities are available but creative affiliates will think of some. My main reason for assuming opportunities do exist is because I prefer to consider problems as also creating new opportunities. The glass is half full. However, this move represents a seismic change for our industry, especially for CPA networks, smaller affiliate marketing networks, and affiliate publishers like me.
I’m not predicting the end of affiliate marketing networks or affiliate publishers. Google Analytics didn’t put all the other web analytics providers out of business. Google AdSense didn’t kill all competing ad networks. It did force them to alter their business models though. Since Google is heavy on technology but light on service, this move could end up helping affiliate service providers. Hey, that’s an opportunity!
That being said, I’m concerned since Google can be a formidable competitor. Consider this: Google has all the data it needs to dominate affiliate marketing. They have collected years of AdSense, AdWords and Google Analytics data. With Google Checkout, Google closed the loop from the search engine through traditional affiliate channels to the merchant’s site and then through the checkout process. Now they can easily connect the dots and monetize it their way. They have data on all of us and know who performs well and probably even why.
I think it’s logical Google will take the next step to “maximize shareholder value” by fully competing within the affiliate network space. It will be interesting and could get ugly. I vividly remember hearing co-founder of LinkShare Stephen Messer predict and warn of this very move years ago at Affiliate Summit 2005. Let’s stay alert. It wouldn’t surprise me if Pay-Per-Action is how Google plans to monetize YouTube.