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January 12th has come and gone. I spent some time yesterday with some tapped-in industry friends and they heard nothing yesterday. I guess it’s just “any day now”.
Adam Viener of Goyami is a refreshingly unique combination of connected and outspoken as he demonstrates in his publication of a discussion he had with a Google rep on how the new affiliate process will work.
The rep describes an “Affiliate Auction” process (ironic choice of words given that it’s the Ebay affiliates who played no small part in the coming of this change).
Going off what this rep said, it appears to work something like this. At the time where Adsense is making the decision on which ads to place, it uses the normal process to find relevant ads. However, then, all of the affiliates with an ad to the same location are pitted against each other together and this “auction” takes place and the top bidding affiliate gets the placement. According to the Rep, the whole group of ads determines the CPC rate, after which the affiliate ads are compared. So it’s not really an auction among affiliates. It’s sort of a one-bid blind auction.
Interesting side effect: If you have several ads in an ad group and the one chosen is subject to the affiliate policy there’s a nuance to keep in mind. If it doesn’t make the cut out of the affiliate auction process, Adwords won’t go back to your ad group to find an ad that isn’s subject to the affiliate process — even if it is more relevant or higher priced than those from other advertisers. There might be a strategy in there somewhere to not mix affiliate ads and regular ads.
Google could perhaps make things more effective if there were, instead of a blind sealed bid auction, some real auction process whereby an affiliate vying for a coveted link directly to the merchant site could see if he’s been out-bid. At that point, he could decide to bid higher or give up and send the traffic elsewhere. Sounds like their approach is more to put up barriers and thin out the herd rather than to build a level playing field. Something they’ve got some experience with.
