Google CPA Will Erode Affiliate Networks

Google are beta testing their cost-per-action network, an addition to their Adsense offering.

A cost per action network differs form a cost-per-click network in that an advertiser only pays for the ad when an action has occurred. That action might be a purchase, a completed form, a valid email address supplied, etc.

Since Google’s announcement, there have been defensive comments from some affiliate programs that Google CPA won’t make a difference to their business. Not sure how they can say this when they don’t know the full details of how Google’s program will work, so I suspect many are quietly concerned.

And so they should be.

Google has massive leverage, both on the advertiser and publisher side. Having had the misfortune of dealing with many dishonenst affiliate programs, I’m first to say – good riddance. I hope Google trounces them. Non-paying, poor tracking, stolen cookies, rubbish affiliate care, poor commision levels etc. The affiliate industry has, in the past, been home to some pretty shoddy business practices.

Not saying they’re all like this. Some are very good indeed, and look after their affiliates well.

But one thing is for sure – they’re all going to get a huge shake-up when legions of Adsense publishers, and content advertisers, start focusing on CPA.

The biggest threat to affiliate networks is that Google will make it easy, for merchants, and publishers, to get started. At present, there are numerous hoops to jump through on the merchant side, and it’s not exactly cheap to get started – in terms of time or money – especially with the bigger programs.

The existing Adwords and Adsense base will be leveraged. The middle men – the affiliate recruiters and managers – will, I’m guessing, be cut out of the loop. The market will eventually find price points, as it does with Adwords, and the cost of less-than-perfect desired actions will be absorbed, or bidded down.

Some established affiliate networks do have something going for them, and that is their close consulting-style relationships with publishers and advertisers. It will be interesting to see if that relationship is enough.

Interesting times.

Leave a Reply