The PeC Review: Google Affiliate Network is an Effective Marketing Tool

Affiliate network marketing offers online retailers an effective, performance-based advertising channel with good conversion rates and a propensity to boosts sales. Like many affiliate programs, the Google Affiliate Network connects merchants with a network of website publishers.

Affiliate publishers place text or banner advertising on their site. If a would-be customer (1) clicks on one of these ads, (2) visits the merchant’s site, and (3) makes a purchase, the merchant pays the affiliate (who sent the customer) a percentage of the sale. No money changes hands unless the merchant closes the sale. So, most merchants can easily afford to be part of an affiliate program.

The Google Affiliate Network makes this connection easy by providing an effective interface (which is similar to the Google AdWords interface) that will help merchants improve their sales. But the service requires a relatively large upfront fee (discussed below) and Google is particular about the sorts of merchants it will accept, preferring those with large sales volume. If only the Google Affiliate Network had taken the same egalitarian and pay-as-you-go approach that has made AdWords successful, it would be nearly perfect. As it provides a lot of value to its customers, however, I am awarding the Google Affiliate Network four out of a possible five stars in this The PeC Review.

An Affiliate Model, Google’s Way

In 2008, Google made a $3.1 billion investment in affiliate marketing and advertising service when it purchased DoubleClick, one of the early pioneers in advertising measurement services, ad serving, and affiliate marketing.

“With DoubleClick, Google now has the leading display ad platform, which will enable us to rapidly bring to market advances in technology and infrastructure that will dramatically improve the effectiveness, measurability and performance of digital media for publishers, advertisers and agencies, while improving the relevance of advertising for users,” said Google Chairman and Chief Executive Officer, Eric Schmidt, when the deal was consummated.

Google was quick to integrate the service, and by July 2008 had rebranded the service, introduced an improved interface, and used its impressive AdSense network to find excellent affiliate publishers. For me, Google’s best value proposition is its familiarity with pay-per-click advertising. It is assumed that if Google applies its considerable AdSense experience to identifying and recruiting affiliates, it can offer online retailers almost unmatched access to targeted sites and therefore to potential customers.

While Google does not disclose average conversion rates for the program, a spokesperson told me that because “affiliate publishers tend to be focused on consumers who are in the shopping mode,” conversion rates tend to be better than other digital advertising channels. And remember, there is no cost (other than a set up fee) to merchants unless they make a sale.

A Selective Approval Process

Google requires merchants to apply to the Affiliate Network, asking for annual sales estimates and average order size. Perhaps as an indication of its propensity for selecting large-volume retailers, Google lumps $0-to-$500,000 in annual online sales together as its lowest annual sales category, and offers additional categories up to more than $50 million in annual online sales. To be considered for approval, merchants must first be interviewed by a Google representative.

The selective approval process is designed to protect the affiliate publishers. In order to get its ads on the best possible websites, Google is careful to offer only quality products from quality merchants.

$1,000 Service Fee, Deposits, and Monthly Minimums Make Google Affiliate Networks Expensive

Once an ecommerce merchant is approved for the service, that merchant will have to pay a nonrefundable $1,000 fee to set up an account. The merchant must also make an initial deposit of $1,000 to cover forthcoming affiliate fees, the payments made to publishers when they provide click-throughs that result in paying customers.

Thus, joining the Google Affiliate Network will cost a merchant at least $2,000 up front, and $1,000 of that does not apply to generating sales. Once the merchant is up and running there is a $500 per month minimum, so it becomes very important to help affiliate publishers succeed, providing them with good offers, great creative copy, and any additional help possible. While I consider these initial costs a bit of a burden, they are competitive with other affiliate services.

Summing Up

The Google Affiliate Network offers online stores access to thousands of excellent web publishers on a pay-for-performance basis that can be very cost effective. But, the service is primarily aimed at higher revenue online stores and requires a $2,000 initial outlay. Although I would have preferred it if Google offered a self-service, pay-as-you-go option for smaller merchants, the Google Affiliate Network is still well worth four out of five stars in this The PeC Review.

Resources

• The Google Affiliate Network
• Google Affiliate Network Application Form