- This topic is empty.
-
Posts
-
Thought I would share this here…
Reports: Google to Ban Affiliate Arbitrage
8 Dec 2004
Revenews’ Wayne Porter points to increasing chatter and expectations of an impending Google ban on affiliate arbitrage – the practice of companies diverting brand traffic to their sites in order to serve it back to the brand as an affiliate customer. The practice is extremely popular both through keyword buys and through search engine optimization techniques. For users, it decreases the perceived relevance of search results, not to mention adding costs to the brands, who are then generally responsible for paying affiliates a commission on sales. Reportedly, the ban will begin in January, according to discussion board participants who claim to have been told by Google reps, and it remains unclear if this would be a human-enforced policy or something that Google believes it can automate.link: http://www.marketingvox.com/archives/2004/12/08/reports_google_to_ban_affiliate_arbitrage/
How stringent will the interpetations be? Is it specific brand names only or multiple forms of the brand as well?
IE
“Sony” is banned
“Sony Walkman” is banned“Sony portable stereo” is ok
????
There was really good money in this for quite a while, and in fact, PPC arbitrage is how I got my start in affiliate marketing. There have been several ebooks written about this. This is also why when you do a search for “university of phoenix” for example, you see dozens of ads going straight to the university of phoenix website.
I think Google will automate this process as much as possible. That’s been their preferred method of dealing with just about everything for a long time. DMOZ’s motto is “Humans do it better”. Google’s motto seems to be just the opposite: “Artificial intelligence does it better”.
This is still just hearsay at this point, from what I understand. I haven’t seen any official announcement from Google on this yet, although the rumor is that the change will take place in January.
I hope this is just hearsay for everyone here sake if I am understanding this article correctly. So Google is considering a ban on all affiliate gambling portals as a example?
Not exactly. There are a number of people who sign up for an affiliate program, then buy pay per click traffic to send directly to their affiliate link. They don’t build a website; they just send the traffic straight to the source. This ban would affect that strategy.
Hi Randy,
Thank you for clearing that up. Was a little worried at one point.so to be clear, if you have say, casinox.com as an affiliate; and you make a review page about casinox, would that be a reason to ban your site?
I mean if you were getting traffic for the keyword “casinox”?
tiafyr
AFAIK, this whole “ban” is related to Adwords, not their organic listings. They don’t take gambling advertising now anyway, so to some extent, this whole issue is moot for our industry. I put “ban” in quotes because this is still speculative. (I haven’t personally heard this was actually happening from Google itself, and as far as I know it’s something that other people on message boards are saying they heard from Google, so it’s not confirmed, although IMO very possibly true.)
As far as whether or not it would affect someone who had a page reviewing a particular product, I don’t “think” that’s what the plan is. Overture doesn’t allow advertisers to buy traffic to send directly to an affiliate page either, and hasn’t for years. Google’s PPC program was the exception, not the rule.
Do a search for “insider slot secrets”. It’s an ebook with an affiliate program through Clickbank. If you look through the Google Ads, you’ll see that 7 of the 9 ads go to insiderslotsecrets.com. Those ads are actually all going to an affiliate page for the ebook. These people don’t actually have websites or pages built for the product; they’re sending traffic straight to their affiliate link.
It’s called arbitrage because they’re buying advertising from Google on a pay per click basis, and they’re immediately re-selling that traffic to the affiliate program, usually on a pay per sale or a rev share basis. In some cases, the pay per sale or the rev share will make them more money than they’re paying per click, so they make a profit.
I used to run an ad for a poker site on Google under certain keywords at less than 30 cents per click. I made over $1.20 per click in commission. So I was making 90 cents profit per click with no website. There was an inequity between the price of the advertising I was buying and what it was actually worth to the program, and I profited from the difference.
The idea behind this alleged ban is that from a user perspective, it’s probably not a good experience to search for something and see 7 ads that all lead to the identical page.
The term “arbitrage” is usually used to refer to people who buy and sell money at different exchange rates and make a profit. This sometimes happens. An example would be if you could buy one pound for one dollar. And suppose that you could buy 5 yen for a pound, and only 4 yen for a dollar. You could convert your money to pounds, then to yen, then back to dollars, and make a profit.
Didn’t mean to ramble…insomnia…
So this wouldn’t apply to casinos who use the keyword: “Dominique Blackjack” and redirect it to their casino? This is only PPC?
“so to be clear, if you have say, casinox.com as an affiliate; and you make a review page about casinox, would that be a reason to ban your site?”
Nothing to do with that.
Also nothing to do with this industry at all, since they don’t take ads from sites involved with online gambling.
It’s a long overdue thing to do, if they do it.
Since this doesn’t affect the online gambling biz, quite frankly I am glad to see this happen.
I have been doing some “Googling” lately to find certain specialized merchandise and it’s getting harder and harder to find what you are looking for because you have to wade through page after page of affiliate links to find a “real” website these days. I know this won’t affect all the SEO pages, but it’s a start toward making it easier to find a real site rather than a redirect page.
