Today I would like to share with you my thoughts about this Google move. How affiliates marketers might get affected.

The display ads market is been controlled by several players like double-click (now own by Google), right media and others while the biggest Google competitor on that market is Yahoo.

The display ads market worth lots of money. The biggest companies in the world, big names like Amex, Coca-Cola, and GE are spending huge amount of money every month.

The PPC affiliate business model is based on arbitrage. We buy traffic, hopefully cheaper than what we get in return, whether it’s a CPA offer or revenue share.

When Coca-Cola advertises on the web they would like to keep the awareness for their brand. A brand campaign is different than a typical affiliate campaign. The goals are different and are been measured differently. Brands campaigns are known with their high budgets. And where the big money is, Google would like to be!

So after Google acquire double-click their next step was to integrate double-click inventory within their Google content network. Now Google enhancing their tracking system to meet the big firms brands campaigns. With the new feature that was lately released we can learn something about Google future intention, at least for the display ads market.

There is no doubt that this change will affect the affiliate industry:
1. More competition on every spot – in these case rich competitors
2. Brands campaigns, especially with the big names, includes huge budgets. This will increase the effective CPC (usually brands campaigns are been calculated by CPM).

If so far we got used to compete with performance based competitors, who are looking for a positive ROI, now we have to deal with a different players playing by a different rules.

I believe that this is only the start of a bigger move after the top advertisers on the web. The affiliate marketing industry is a major part of Google income but it’s also one of their top biggest headaches, caused by affiliates who use Google AdWords to promote gray products. At the ends of day Google is the one who need to deal with their users complains, maintaining support teams etc.

Google probably prefer to sale their inventory to the less choosy– Brands campiness. It’s not that Google have something against affiliate marketer, it’s just easier to work with big accounts rather with those who spend $100,000 per month (no it’s not a typo, Google will prefer account of $5,000,000 a month). As Google will fill those spots with Brand campaigns, more and more affiliate accounts will be banned and/or more restrictions will be added to AdWords policy. Either way, it’s not going to be easy for affiliate marketers, at least not at the Display Ads market.

I believe that during 2010 we are about to experience some major changes with the way Google treat affiliate marketers. In my opinion those who will play by Google (changing) rules will survive (Especially those who spend lots of money each month).

Affiliate marketers have ever been and will always be the smatters among the online advertising businesses. It’s something that no one will be able to take away from us. So keep your mind open and be ready to hear more from Google. I’m sure it will come soon.

In this post I would like to tell you about a real story: How a an affiliate marketer, my friend, left money on the table just because he was lazy to pay attention to the details.

I sat with my friend this week in a coffee shop. We do that from time to time, sharing with each other ideas. My friend showed me one of his new campaigns landing page that he has been working on in the last two months.

As a veteran affiliate, he did A/B testing with two versions of the landing page. He checked the effectiveness of his landing page in terms of click through – The percent of people who visit the merchant website via his website. But that’s the point where he stopped, because in his opinion the difference between the landing pages performance is negligible.
How negligible? 43% vs 37%

In this niche there is no doubt that 40% click through (CTR) rate is fairly acceptable and even a bit higher than the average. Probably this is why he was impassive about the A/B testing results, knowing that his campaign perfuming relatively well. That’s the problem with veteran and with newbie’s as well – we tend to forget where to put our effort in terms of time consuming.

Before you start struggle with your traffic make sure you did all in your power to improve your landing page performance (CTR). In this case the 6% difference worth more than $1,000 in net revenue per month!

But you will probably not get convinced, as my friend was not, until you will see the math behind it. So here we go:

The average daily clicks to his page is 600 (yep, it’s a small/mid campaign)
The conversion rate within the merchant website is 4%
The payout is $24

The gross sale for LP 1 is:
600 * 0.43 * 0.04 * 24 = $247.68

The gross sale for LP 2 is:
600 * 0.37 * 0.04 * 24 = $213.12

Since we are talking about the same traffic, with the same cost, the difference between these landing pages results is NET PROFIT.

So the total net profit will be
(247.68 – 213.12) * 30 = $1,036.8

With less than 5 minutes of work my friend will get an addition of ~$1,000 per month depends which landing page version he will choose.

Think that if you have 5-7 medium PPC campaign, 6% difference within your landing page can give you more than $5,000 per month.

More than that, to get the same addition net profit using the landing page with the low CTR you will need to raise your traffic by more than 16%!
(Assuming that the converting ratio will be kept for the new traffic as well)

Keep this in your mind next time you try to think how to increase your PPC campaigns performance.

For those of you who are not familiar with this term, Google Slap is a situation where for a specific domain (at least in my case) you stop getting any traffic from Google AdWords.

Since I am not familiar with this situation, at first it looks like that there was a problem with the AdWords billing. When you pay via invoice, potentially, there is the risk that Google will not record your payment on time. In that case they have the right to suspend your account. Few days after I spoke with one of the Google AdWords support team representative about it I’ve got an email from them saying that there is nothing wrong with my billing but Google decided that my website does not meet their guidelines and therefore the website got a low quality score.

To be honest I was surprised to get this email. From day one I kept the principle of doing things in the right way. I develop website with a clear added value to the visitor, using a unique content. I don’t use one page landing page just to send the user to the merchant website. But at the end of day, I’ve got my first Google Slap.

Obviously, it’s not a great feeling to get a Slap. You lose income, and you have no one to hear your complain. Google are kind of a giant that don’t care much that you paid them 15K a months for a single campaign. They have their own agenda and they will not reveal it to you, although they will direct you time after time to their guideline page.

However, I think there something that I can learn from this Slap.
I asked myself what’s the difference between this campaign and the other that did not get slapped. It’s a theory that you might want to check with your campaigns as well.
Please note that I am not sure how solid this theory is.

The campaigns that I’ve got slapped with belong to a very crowded niche. Lots of affiliates are sharing the same inventory to advertise their products. With the campaigns that I did not get a Slap (most of them), there is less competition on the inventory.

So they key might be the inventory popularity!

Google might not like the fact that too many affiliates sharing the same inventory. Experienced affiliate marketers know how to get more for less: raising the page quality score in order to get low bids, using the right ads to get a high CTR and also by that lower the bids.

It’s easy for Google to see which keywords are most wanted. And it’s easy for Google to slap those who make her less money. Google will not slap you if you are the only one who bid on a keyword. When Google don’t have alternative advertiser, Google will lose money!

Google never tell you why you’ve got a slap. Their guidelines don’t tell you much; especially if you followed their guidelines – they will keep redirect you to their guidelines instead specifically tell you the reason for the slap. It’s a convenience way to make sure they will get the best ROI for their inventory, keep doing business with you and yet stay away from the authorities who keep their eyes after their actions.

But you know; if you can’t fight it, join it.
Using Google AdWords I made lots of money. I believe that for any difficulty in life there is a solution that you can adopt. I know from my colleagues that every Google slap forced them to try harder. They all end with a higher income, comparing to the time before the slap.

Try to look for niches that the inventory is still not so crowded. You might find my theory good for your needs as well.

Yes, back in the old days it was very easy to get a high ranking on all of the top three search engines. Most of you will find it hard to believe but a change in a web page that you made today affects its ranking the day after. Well those days are gone and now you need to wait between three months to a year before you see your website on the first SERP (search results pages), assuming that you know SEO.

I am still doing SEO and will probably never stop. It’s a great source of income but it takes time before you get a return on your investment.
When SEO became more complex I used PPC for research – I tried to find the keywords that convert to sales. After I found the right keywords I started to optimize my website. At that time I did not used PPC to make money (that was a huge mistake!).

A year ago I started to do PPC as a method to earn money. I am still doing SEO to the keywords that convert well. However, unlike in the past, until those websites get to the top I continue with the PPC while keeping a positive ROI.

The common belief is that PPC = long tail keywords. I found that in order to start with PPC and keep a positive ROI you don’t have to start with a huge list of keywords. When you start to optimize a new website you don’t care much about the long tail keywords. You try to focus on 7-10 keywords.  The same you can do with PPC. Try to find your root keywords that convert and than start to expand your list based on those root keywords.

The advantage of this method is far from getting a positive ROI. When you start with a small list of keywords usually you will get a better CTR than if you had a long tail keywords list. Keep your CTR high as possible. It will help you keep your bids price low. When the CTR goes high the bids get low and your ad position climb up as well. You can read more about it in a previous post of mine: High CTR vs High ROI

It’s also a great way to save time – first you find whether your niche or product is selling and only than you keep digging for more traffic.

A tip for a newbie: start with the obvious.
I will explain more about this theory in my next post.

In the past I talked about EfficientPPC which is another great software (and cheaper) for same purpose.

After reading John Chow review I had a thought that I would like to share with you: On the same way that EfficientPPC or SpeedPPC can be useful they can harm your PPC campaign.

After saying that its time for the explanation:

Right after you uploaded a new PPC campaign to Google, the campaign start to gain what so called “The Overall Campaign Quality Score”. Your campaign CTR is examined. In general, if you have a high CTR your ads will be seen on the top of the ads list and you will pay less per click. If you have a low CTR your ads will be seen on the bottom of the ads list or even will not be seen at all and you will need to pay more per click.

EfficientPPC or SpeedPPC will create for you lots of keywords in variety of combinations. For most of the keywords you will have between one or two impressions per day. The odds that you will get a high CTR for long tail keywords is pretty low. Since you have lots of long tail keywords with the campaigns that were produced by EfficientPPC or SpeedPPC, your overall campaign quality score will be low right from the start. This is not something that you would like to happen. Low CTR from day one harms your overall campaigns quality score.

My advice is to start with a limited list of keywords that you believe will best serve your offer. For the first few weeks your goal should be to get the best CTR that you can get for your campaign. A good CTR can start at 3% up to 20%. Better to start with the mainstream keywords although you will find that with those keywords you will loose money! Try to stay close to breakeven by reducing the bids but don’t try at that point to make a profit.

In most cases a CTR below 3% for the mainstream keywords will imply about a trouble with your ads or the demographic target.

After you have achieved a high CTR for your campaign start adding long tail keywords to it. At this point keep the balance between the keywords with the high CTR and the keywords with the low CTR so the overall CTR will be above 1%. You can keep your CTR even above 3% if you will add the long tail keywords not at once but in a group of keywords every few weeks while eliminating the keywords with the low CTR.

I hope you will find this strategy helpful.