We want to educate our merchants about a troubling trend in paid search as it relates to affiliate marketing. Merchants who issue a blanket ban on affiliates' ability to bid on trademark and good target keywords are at risk of alienating top performing affiliate performers and, even worse, of diminishing the revenue earning potential of the merchant's affiliate program. Yes, it's a good idea to maximize your own PPC budget, but take into consideration the following before prohibiting affiliates to participate in PPC marketing. First, we recommend that all merchants carefully evaluate the true overall cost of sales of your in-house PPC campaign management. If the true cost of sales for the in-house PPC campaign (including HR considerations such as employee salaries and benefits) is not greatly less than the commissions being paid to affiliates, we recommend that merchants allow affiliate partners to bid on terms that were previously off limits and loosen most restrictions. Perhaps guard only your trademark and your top 10 or 20 best converting terms and leave the rest to affiliates (instead of your competitors) to use. Merchants will benefit from having these affiliates working on an acquisition level that is more or less in line with in-house expenses. Also, it's important to note that affiliates who are not allowed to bid on certain keyterms will abandon your affiliate program in favor of that of your competitors. Another reason for merchants to keep top affiliates in their corner is the changing nature of paid search bid caps, which are no longer the deciding factor with respect to ad placement. Until recently, conventional wisdom was to allow bidding on most terms but with bid caps in place to prevent escalating bid costs per keyword. But Google now ranks ad copy relevance above all other considerations. In this climate, it's quite easy for top affiliates to develop great ad copy that gets higher placements than a merchant's own in-house paid search ads, and to do it at a lower bid cost. With all of these factors being true, PartnerCentric strongly urges all merchants to treat affiliate partners as just that - as true marketing partners. Policies can be issued for both the affiliates at large, with specific more lucrative policies designed for a handful of your top search oriented affiliates. One other point, PartnerCentric does not endorse the use of domain squatters or PPC direct linking. We view these practices as cheating, and affiliates who employ these tactics stand to hurt the collective reputation of all affiliates. The more merchants can understand and collaborate with the needs of affiliate partners, the greater the reach and return on investment for the merchants' affiliate programs. This is an extension of your marketing budget at a set cost. It's a win-win strategy for both parties, which is the very nature of affiliate marketing. For more information about your specific program or policy questions, contact Linda Woods at
linda@partnercentric.com.
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PartnerCentric stance regarding merchant PPC policies
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