Affiliate Marketing Blog - a Traffic Junction Blog

Over the past two weeks, I saw two new reports that cover results of paid search marketing for e-commerce websites. One of them, by Logan Tod, says that e-commerce sites are wasting money on search (!) because of poor keyword research and poor content on landing pages (as reported by Netimperative). According to the Netimperative report, the “study spanned over seven million search visits to e-commerce websites, examining what happens when visitors land on a page from a search engine”.

On the other hand, another report by 360i & SearchIgnite, titled “Giving Clicks Credit Where They’re Due: What You Need to Know When Allocating Your Search Budget”, talks about the “assist value” of non-branded searches in a search marketing campaign. There are some baffling findings — one such example is that the ‘more times a consumer clicks on a marketer’s ad, the more likely he is to convert” and that consumers who click on multiple ads of the same marketer are probably likely to convert better.

Honestly, I find some of these very strange; especially the fact that the consumer is likely to keep clicking on the same ad… nevertheless, the study claims to be based on “more than 3.9 million users, and 5.1 million clicks during the first quarter of 2006″. For those interested in finding out more, download the report.

Here’s a very quick summary of the two reports (discounting the fact that some of these would be written with a certain bias anyway):a) if you are allowed to bid on branded terms, do so, because these convert better (b) don’t ignore the long-tail and bid on the entire breadth of keywords related to your products/services (c) while investing in paid search, ensure that you have invested as much in the landing pages and content to faciliate the action you desire your users to take.

Jason Miller of WebProNews called it the eBiz bombshell; it certainly is one. Amidst all the rumors of MSN and Yahoo partnering together (which Yahoo seemed to dismiss almost disdainfully), Yahoo & eBay have quietly sprung a big surprise. Below is what Jason wrote for the daily newsletter.

“eBay and Yahoo dropped an announcement bomb early this morning saying that the two Internet giants have agreed to combine their efforts on a number of projects. By 2007, expect an increase in eBay search results on Yahoo!, an increase of contextual text and graphical ads on eBay, PayPal to power Yahoo! Wallet, a co-branded eBay Toolbar, and click-to-call advertising using Yahoo! Messenger with Voice and Skype.”

Quite a heady combination of search, advertising, commerce and voice communication.

The developments are unlikely to be fully in effect until next year and even then, it seems that the advertising/ cross-promotion partnerships will be limited to the United States.

Meg Whitman has previously called the acquisition of PayPal one of eBay’s best acquisitions and this is being proved again, as not only will Yahoo benefit with the use of PayPal for all of its payment processing but also PayPal/eBay with the volume of online transactions that Yahoo gets across its various web properties.

While very high profile, there’s still quite a bit of mystery as to how Skype is fitting into the whole eBay set up — slowly even that is beginning to make sense.

However, when such big players decide to partner together, the sceptic in me can’t help but have a few doubts. For example, how does this close relationship between the two companies impact eBay affiliates? One could well argue that with the additional promotional opportunities, affiliates will stand to benefit owing to more traffic and probably more conversions. Likewise, will Yahoo’s search results page (whether paid or organic) lose some more of its “neutrality” (it’s algorithmic results are already “compromised” to some extent with its paid inclusion program) as a result of promoting more results from eBay?

That’s the rapid evolution of the paid search advertising model. While Pay per click (PPC) continues to be extremely effective for businesses that take time and effort to do it well, but all the concerns of click fraud and rising bid costs raise some doubts marketers’ minds if they are getting the best bang for their buck.

So the move towards pay per call (PPCa), perceived to be one level higher in terms of intent. It is not without its own problems or immune to some of the same problems that PPC facea. Yet, Miva is claiming that bids for its PPCa have touched 35 pounds, which is certainly good money and an indication that some advertisers are willing to trust and test the system in the quest for alternative / complementary channels to PPC. Surprisingly, at its recent Press day, Google didn’t give much specifics as to where it plans to take its own PPCa program, which it had started testing a few months back.

Last week, when Snap.com relaunched, integrating its algorithmic and sponsored search results, it announced a per per action advertising model. Jim Kukral writes about it briefly besides speculating if Google is upto something on similar lines.

First up, the UK search marketing sector is projected to hit GBP 1.4 bn pounds according to e-Consultancy, reports NetImperative, a 65% growth compared to last year. Paid search accounts for most of this pie and is projected to reach GBP1.26 bn pounds.

Interestingly, the SEO market is also expected to record an impressive growth rate of about 50% and hit about GBP147 million by the end of this year. I find it interesting because SEO as an industry is undoubtedly under increasing pressures and challenges as search engines become increasingly smarter. Even if the market appreciates the value of high search engine rankings and is willing to spend money on achieving that (obviously that is the case as can be seen from the grwoth projections), the days of being able to ‘manipulate’ the search engines (particularly Google) to achieve and sustain high rankings very quickly are numbered if not totally gone. Therefore, if the SEO market size is shown to be growing rapidly, I’d be very surprised if the scope of the SEO services that are offered hasn’t changed significantly.

Meanwhile, Google has launched distribution of video ads through its content network sites (AdSense publishers) in the United States, Canada and Japan. Surprisingly, UK is left out of this initial roll out of video ads. All the major enhancements to the Ad formats that Google has introduced to its Adwords progam have been directed only at the content network (be they image / Flash ads and now the Video ads). Rich media advertising — with audio and video is touted to be the future of online advertising, so this is defiinitely an interesting move by Google. In fact, one analyst has called this the beginning of Google’s move into television advertising.

Yet, I believe video advertising will require a lot more policing as I believe there is far greater potential for “mischief” — in terms of brand protection as well as the inclusion of irrelevant or undesirable content in the ads.

Last year, the local online ad market in the US was about $3.2 billion, which is projected to reach about $5.3 billion by the end of the decade, according to a report by JupiterResearch last year. Of this, a whopping 70% was supposed to be from local classfieds. That’s a serious spend.

The reason I mention online classifieds now is that classfied sites seem to be sprouting everywhere; most of them free for advertisers. The monetization of these sites seems to be from programs such as AdSense or paid-for enhanced listings, but by offering it for free to advertisers, they certainly manage to attract a lot of traction from advertisers (though I must say, many listings are created simply to create search engine visibility).

There’s even a search engine specializing in showing results from classifieds — Oodle, which has now extended its services to the UK.

Seems like an interesting channel to try out for affiiiate marketing and see if these work to drive traffic to affiliate publisher websites.

Last week, ad Pepper media International, a company listed on the Frankfurt exchange, purchased UK-based affiliate marketing network, Webgains. This will make the latter a fully-owned subsidiary of ad pepper media. For more details on the acquisition, see the press release.

Meanwhile, TradeDoubler has posted stupendous results for the first quarter of this year , highlighting once again the online marketing/advertising boom. Sample this: Total revenues increased by 91%; gross profit increased by 67% and operating profit increased by 153%. The company has given a rosy outlook for the full year 2006.

Having acquired a contextual advertising network earlier in the year, the company is now launching operations in Russia, aiming to capitalize on the growth of the Internet population in that market. It will also serve Russian companies planning to target markets in other parts of Europe. TradeDoubler has specifically stated that the introduction of the Russian operations will not have any effect on the 2006 profits.

No, this is not a name game.

If you look at the two threads on Revenews by Wayne Porter and Beth Kirsch, you realise that affiliate marketing is in a state of flux. Not for the first time, there is a question on the value of affiliate marketing. As merchants put more restrictions on how affiliates use search marketing, this gets all the more magnified, because search marketing has been the dominant strategy among affiliates.

I’d be impractical if I thought that we affiliates will continue to do business the way we have always been doing so– it doesn’t happen in any business and then online affiliate marketing is a relatively new concept.

We’ve used search extensively besides the portal model (which one can see is akin to the content model) and this hybrid approach works for us. While others may choose other approaches, we recognize that we may also have to adjust and adapt our strategies to cope with the changing enviornment (technology as well as busineess).

To make affiliate marketing a sustainable (and lucrative) business (which I believe it is), we realise that the only option we have in the long run is to be able to generate revenues (meet a merchant’s marketing objectives) at a cost lower than other marketing channels available to them while ensuring (and where possible, enhancing) the integrity of the merchant’s brand/ product/service.

Last week, I wrote about how Yahoo has been up to a lot of activity without causing too many ripples. In the meantime, everything that Microsoft is doing is under the microscope (including the rumored take over of Yahoo).

Better late than never seems to the philosophy pertaining to search and the media business as far as Microsoft is concerned. While acknowledging that the company should have entered the search engine arena much earlier, it has just let loose its aggressive intent — 3 acquisitions within a span of a week, a plan to spend an additional $2 billion and opening up its AdCenter paid search advertising platform (ironically, the talks about the Microsoft-Yahoo relationship surfaced round about the same time that MSN was separating itself completely from the Yahoo search marketing platform!).

If we look closely at the 3 acquisitions by Microsoft, it is easy to draw the connections and what it really sees as a major revenue stream of the future: advertising. By acquiring Massive, a video game advertising company, it expands its advertising reach significantly; Vexcel will help it obtain and analyze geographic data and with DeepMetrix, it gets web analytics’ capabilitics (remember Google and Urchin? Will Microsoft integrate DeepMetrix with its adCenter and offer it for free just like Google offered Urchin?).

At the same time, continuing with its phased roll out of the AdCenter platform, the company plans to roll this out in the UK market next month. AdCenter seems to have received good initial feedback in other parts of the world; so it will be useful for search engine marketers in the UK to be able to use this system and hopefully find an additinal cost-effective medium for their advertising spend.
Meanwhile, ClickZ reports that Yahoo is also planning to announce the phased roll out of its own search marketing platform, which I believe is long overdue. If the details mentioned in the ClickZ report are accurate, these would go a long way in making YSM a lot more user friendly—-in my view, its lack of user friendliness has probably hurt Yahoo as much as anything else in its quest for a share of the PPC pie.

Every other day there’s a post somewhere about MySpace, its growth and influence (positive or negative) on society. Like them or hate them, fact is that social networks like MySpace have acquired a certain critical mass which make them influential in many ways; influence is a marketer’s delight.

The growth of the scoial networks in the UK too has been conspicuous. End of 2005 saw iTV acquiring Friends Reunited for about 120 million pounds. Now, latest stats released by Hitwise reveal that “bebo” was the 3rd most popular search term for the 4 week period ending April 29 amongst UK’s Internet surfers; in fact searches for bebo were way higher than that for MySpace.

The size of the user communities of these sites makes them attractive for marketers. The rates for advertising on MySpace are attrocious from what has been written in various quarters; and a site like Bebo uses AdSense to monetize its traffic.

But surely, there has to be a way for affiliate marketers to find a way through this channel? How big of an opportunity is it really for affiliates and how could that be tapped? I have a strong feeling we’ll find out pretty soon .

There’s a perception that Yahoo is losing quite a bit of the buzz, especially on its search front. Quite true, in fact and not totally surprising either considering a statement made several months ago admitting that it has given up on the number one position in search.

While things may have been relatively quiet on the search front (at least publicly), Yahoo has been upto quite a bit recently. All of which kind of validate that Yahoo’s strength is not (and never was) search. It is a savvy content publisher/ aggregator that is good at making money from its various advertising streams. Its strategy seems to be of enhancing and building up vertical niches and integrating one with the other, such that the whole is greater than the sum of its parts. Some recent examples:

a) First up, Yahoo’s acquisition of FareChase and integrating the host of features and functions the travel search engine had with some of its own. FareChase is now out of beta and it is very much an integral part of Yahoo; a clear attempt to enhance its travel vertical. More on the FareChase integration here.
b) Secondly, Yahoo just launched a consumer technology site that aims to “making technology easy for all Yahoo! users, especially those without a deep understanding of technology and gadgets”. This site will integrate a lot of Yahoo’s features including results from its shopping engine.

c) Yahoo introduced a fixed rate model for featured listings in its Local Listings– a new initiative from the pay-per-click model adopted for listings. It is continuing to use the PPC lisitngs as well; however, the fixed rate model is probably targeted at smaller advertisers who do not have the resources or the inclination to maintain and monitor a PPC campaign.

d) Lastly, and this is most relevant from a UK marketer’s perspective, Yahoo Search Marketing is now working with OMG to to distribute results from the Kelkoo site as well as its sponsored listings and directory listings. Affiliates can opt into this program. The company has the Yahoo Publisher Network program already (equivalent to Google AdSense) and this seems to be very much like inviting websites to be part of the publisher network. The interesting aspect is its leveraging an affiliate network to enhance its distribution.

All in all, the buzz may not be quite there, but there’s certainly not a lull at Yahoo either..