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March 22, 2007

Can Google Change the Entire PPC & Affiliate Market Space?

By Li Evans

Scoble Robert Scoble's got a scoop, and it's a good one.  In fact it's one that everyone in online marketing should be paying attention too.  It's also one that's going to affect many online marketing budgets in a huge way, if it comes to fruition.  This is one bit of news, that if it's true can change the whole landscape of both PPC and Affiliate Marketing as we know it, and if anyone has the clout to do it, it's Google.

So, my question now is, if Google does move into this territory, what happens to all those other advertisers that use to be in positions 4 on out to 100 (or however high they go)?  Scoble gives the example of San Francisco Sushi.  Lets look at "coffee online", there's a lot more advertisers here.  So what happens if Google does implement this idea further?  See how this could change PPC?

Coffeadvertisers Keywords are going to go through the roof, especially in very competitive areas, and both Google's Pay Per Action program and personalization efforts are going to take a much more prominent place.  This type of change, if it is actually going to happen, would be huge.  Advertisers would need to really keep a handle on their budgets and justify advertising on the keywords they are, to an deeper degree.

Now, tie this little tidbit into the fact that Google's launching Pay Per Action.  If Google does start going the way of limiting the advertisers in Adwords, and it does become expensive to bid on these key words what's a company to do?  Enter two things:  1) Google's Pay Per Action program and 2) Personalization.

Moneyweb Pay per action (a.k.a. Google's version of an affiliate marketing), offers the alternative to the advertiser if Google goes to this "limiting route." It maintains that they're only going to pay for whatever action is completed.  It would no longer be about branding and being there.  On the flip side, affiliate marketers, would only be wanting top converting sites.  Google would turn itself into the premiere place to be for both advertisers and affiliates, and could conceivably shrink both CJ's and Linkshare's control on the market space.

Personalization would help if you are only targeting certain segments of the public where competitors might not be thinking about.  It could help lower the costs for the keyword bids, but again, if it's a hugely competitive market, I really doubt personalization is going to help out.

Now I go back to my post the other day about Linkshare and CJ having something to worry about?  When you tie this information that Scoble's presenting into the entire overall picture - Linkshare and CJ might have some big trouble on their hands.  This is no longer a case of another competitor entering the market space.... this is the entire market space starting to change.

We in for another changing/morphing of our industry, hang on, I think it's going to be a bumpy ride!


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