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A brief history of how the Google Affiliate Network began

On Monday, June 30th it was announced that Performics was becoming the Google Affiliate Network. The announcement came as part of a series of changes that have been taking place ever since Google acquired DoubleClick, Performics’ parent company, for 3.1 billion dollars in April 2007. After an extended review both the FTC (November, 2007) and the European Commission (March, 2008) approved the acquisition. With deal finally closed the question became what to do with the assets the Performics brought to the table. Not only was Performics one of the longest running and successful affiliate marketing networks but its search business had blossomed as well. The decision was made to sell off the search portion of the business, a smart move considering the inherent conflict of interest in Google owning a search firm.

“Google could have easily sold the affiliate business as well but they specifically made the decision to keep it because of the opportunity it provided,” said Chris Henger, former VP of Marketing & Product Development at Performics and current Group Product Manager at Google Affiliate Network. “We are now in the midst of full integration into Google, organizationally, technologically, and infrastructure wise. Members of our team on the Advertiser and Publisher side have been meeting with their counter parts to make sure we have a complete understanding of how Google is structured and organized to support advertisers. Google has been very welcoming in immersing us into the business.”

How will Google impact the affiliate marketing industry?

Industry insiders have long known that affiliate marketing works. It drives sales for advertisers while providing excellent ROAS. But sometimes it takes a mainstream player to buy into the practices of a niche industry before it is widely accepted. Chris feels that the acquisition by Google heralds such acceptance, “Google’s participation lends credibility to our industry. It raises the industry’s profile and cements affiliate marketing as an effective marketing tactic.”

What Changes Can Publishers and Advertisers expect?

With any integration users, accustomed to a particular system, are concerned how new changes will impact them. Google has chosen to keep the existing Performics’ business intact, allowing advertisers to work with the same account teams that have been supporting them all along. In the short term users will see a rebranding of the Performics’ interface as well as basic interface functionality improvements.

Other improvements long term Performics’ customers can expect include better billing and payment systems that will leverage Google’s global footprint and improve the speed in which publishers are paid helping overcome the challenge of multiple languages and multiple currencies. Google’s current ad systems also have a great algorithm to predict which ad unit will convert better, improving the way publisher’s monetize. Relationships, something Performics was known for, will remain core to the business.

“Matchmaking will continue to be important to our roadmap,” explained Chris. “We display contact information in a very transparent manner that we think is crucial for both advertisers and publishers. It facilitates matchmaking. We have a VIP designation in our interface which makes it very easy for advertisers to identify key publishers.”

“We are working on expanding our tools to make matchmaking even more conducive,” he continued, “to make our system a little more Web 2.0 like in terms of communication. One of the things I’ve always felt about affiliate marketing is that there is a fair amount of inefficiency. The opportunity here is how do we make things easier for publishers, how do we bring more automation to save time for both advertisers and publishers? Google already has those technologies internally. Our biggest challenge is how to best integrate into their system. As this integration relates to our competitors we are excited to compete with the resources and technology that Google brings. We think we have a really compelling offer for advertisers and publishers to work with us.”

What innovations will Google bring to the table?

When people focus on Google the conversation ultimately turns to the technology they have at their fingertips. Many in the affiliate industry are curious to see how that technology will be used.

“We believe that Google defines innovation,” Chris responded. “They are constantly pushing the envelope on new products and new product ideas. There is a whiteboard full of things we can do to improve publisher monetization of advertisements and expand distribution opportunities for our advertisers. Google’s technology opens the door for new types of distribution and widens the different ad units we can develop. ”

“Think about all the things they are doing in video with YouTube,” he went on excitedly, “When you project out two years from now what is the affiliate industry going to do with video? What is going to happen in mobile? Personally, I am not convinced yet that consumer adoption of these technologies will move product. However, if it does, we are uniquely positioned to take advantage of that on behalf of our advertisers. We are excited to explore those opportunities.”

Will trademark bidding be policed?

Recently ShareASale has been lauded for steps it has taken to better define how affiliates are allowed to utilize search tactics especially when it comes to trademark bidding. Google seems to be in a particularly good position to have an impact on how the industry deals with trademark bidding. Is that something they intend to take on?

“I think that trademark monitoring really comes down to an advertiser’s decision,” responded Chris. “There are many examples of business models where marketers will want or have to permit other parties to be able to participate in the search market related to or around a trademarked term. It is a very tricky one to have a blanket statement on it because what may be the right policy and decision for one advertiser is not right for another. So as a network we have always felt, regardless of being part of Google, that it is the advertiser’s decision.”

The annual Performics’ Client Summit was postponed, will we see it again?

The announcement that the affiliate portion of Performics’ Client Summit was to be postponed was met with disappointment on many forums. Chris said that the decision was made due to the pending sale of the search business and to hold a search client focused event to help with the transition. As for the affiliate portion of the event, it will occur this fall most likely in early October. Dates and the Chicago venue are being finalized and should be announced this month.

What response would you like to see about the launch of Google Affiliate Network?

A far cry from the negative coverage when the initial purchase of DoubleClick was announced the overall response to the launch of the Google Affiliate Network has been positive. Of course, speculation has run rampant including some suggesting that this means doom for the competition.

Although Chris is looking forward to competing with LinkShare, CJ and ShareASale he brushes aside such speculation stating, “I want to focus on how, as an industry, we can take this as a positive rather than having these various conspiracy theories out there around Google.”

“Google has a philosophy that everything they do is best for the end user,” he continued. “It is their core principle. If decisions are made that are always the best for the end user then good things overall will happen. If doing what’s best for the end user is everyone’s focus then products will get bought, advertisers will be happy, and publishers will get paid. Google’s philosophy is a watershed positive force within our industry.”

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