Google biting the hand that feeds them
The old saying ‘Don’t bite the hand that feeds you’ is an old but valid mantra. The last 12 months has seen Google snapping away like a rabid dog and many small businesses and affiliates are either out of business or fighting hard to survive.
The growth of Google’s sponsored search business (in the early days) was largely driven by big brands and affiliates – small and large. Now let’s just quantify what I term as an affiliate, in my view; any website that generates it income from being an intermediary to the real destination (eg: where the consumer makes its purchase) is an affiliate. So that encompasses the thousands of sites from comparison shopping like CompareStorePrices, content sites like Wildmushroomsonline and vertical search sites like Goissimo.com.
so from the cry small to the major players like Moneysupermarket, Gocompare, Comaprethemarket and Travelocity, these are all in effect affiliate sites, even Google itself is one massive affiliate site as it sells nowt but advertising space…
So what is Google doing? Well logically you would say that it would be in Googles’ interest to workout what the maximum CPC the ‘destination’ sites can afford and based their so called ‘ quality score’ to effect all advertisers for a specific keyword to enable only those best performing detonation to be advertisers. Sounds fair? Well of course, yes it is. It gives the user a better experience and Google more buck for their click. However, this could fundamentally change the Internet. When you look at the amount of websites that exist, and the amount of money on the merry-go-round, you soon realise that only a small percentage of sites are actually real destinations and that much of the entire business model of online is built through the dispertion and spread of marketing money to get users to do the final purchase.
With Google being the all powerful beast that it is today, the fact they have made it so expensive to buy clicks these days and so hard for intermediaries to get volume of traffic at the right prices, I personally have seen lots of ‘affiliates’ hit the wall. These affiliate companies have no choice but to find traffic from elsewhere, and as most of us know, good converting traffic is hard to finding volume.
Google can certainly get more money from the system, but to what effect long term? Is the process of squeezing the middle man out of business actually going to reduce the size of the Internet? And at some stage potentially hurt Google? It may be possible to see a situation where the concept of being an affiliate advertiser on Google is a complete non starter and nearly all advertisers are destination site…. But this could and likely would lead to a reduction in bidding war which, unless Google went down the route of minimum category bids may lead to a global reduction of bid prices if the affiliates are not there to splash big marketing bucks growing their traffic.
