The purpose of this post is twofold: First, MSN Adcenter is in the process of taking a serious stance on how they will display results for multiple URL submissions - this change is clearly targeted at search-engine marketing (SEM) affiliates who in many cases use the display URL of the merchant they are promoting, but is supposedly different than Google’s stance in one significant way (read below). Second, unfortunately, ALL of the major search-engines, including Google, Yahoo, & MSN have declined personal invitations from Search-Engine Strategies (SES) conference personnel to provide a representative to speak on the “Search Arbitrage Issues” panel at next week’s SES show in Chicago.

As my readers and friends know, I’ve spoken at previous SES panels that explore issues around search arbitrage (for previous blog posts about search arbitrage CLICK HERE and HERE and HERE. At SES - San Jose, which was held a few months ago, Google was brave enough to offer a panelist - KIM MALONE, the head of Google Adsense - to discuss Google’s position on search arbitrage - CLICK HERE for a link to an overview of that panel. As a result of Google’s presence, the Search Arbitrage Panel at SES - San Jose was one of the most attended and popular events of the conference. However, this time around, as I mentioned above, Google, Yahoo, and MSN have declined representation on this panel - THE REASON? Of course they did not give a clear reason outside of some boilerplate language that doesn’t say too much of anything. However, the fact that they’ve declined is a bad, bad sign for SEM affiliates and search arbitragers in general and clearly suggests that the search-engine’s will continue to develop policies that limit or prohibit this kind of activity…..

As you know, Google has already taken numerous steps to minimize or completely rid their paid search results of search arbitragers and search-engine marketing affiliates (i.e., (1) Google only allows ads to be shown for one display URL per keyword - this clearly targets SEM affiliates; (2) Google continues to tweak its so-called “Landing Page Quality Score Algorithm” - this directly targets MFA [made-for-adsense] websites that do nothing more than redistribute contextual ads…at the same time, it targets SEM affiliates.) Both changes are consistent with what I believe is a BIG BROTHER approach to paid search advertising that I strongly disagree with.

If you can recall, when paid search was “invented” back in the late 90’s by a company called Idea Lab’s with a core product called GOTO.com, the system was completely free market. In other words, the advertiser that paid the most for a particular keyword got the top position…no questions asked. While many industry folks complained that this process would never work, not only did it work, it worked so well that a company by the name of Google later adopted a similar model that has since been redefined numerous times over…By the way, the GoTo model was so revolutionary that a company by the name of Overture acquired the company that was later purchased by a company called Yahoo - the same basic free market paid search model created through GoTo.com is still what Yahoo uses - however, as you know “Project Panama” will change all of that and the new Yahoo will look like and work almost exactly like Google Adwords. What does this mean - it means that Yahoo is also likely to follow a similar policy to Google as it relates to SEM affiliate marketing and search arbitrage in general. In short, these policy changes will limit or completely rid the paid search results of SEM affiliates and arbitragers, unless something is done…

Now, MSN has entered the mix of “SEM Affiliate / Search Arbitrage” policy. However, notice that I didn’t say anti-SEM affiliate, anti-search arbitrage policy. Here is MSN’s new policy:

“MSN will be changing its policy on multiple pay per click search ad listings showing the same display url. Historically, more than one listing with the same display url could show on the search results page. The new policy discontinues this activity. Visibility on keywords will be limited to one ad per display url. Should two ads be bidding on the same keyword, the ad with the highest click thru rate will be displayed. This is an important change to be aware of as it differs from Google’s display url policy. Unlike Google, in MSN ownership of the actual display url does not grant the advertiser the right to have their ads shown above affiliates or display url pirates. MSN feels it is up to the advertiser to monitor their affiliate’s activities including utilizing inappropriate display urls.”

Well, in my opinion, this policy isn’t all that dissimilar to Google’s policy.

In response to MSN’s position that “Unlike Google, in MSN ownership of the actual display url does not grant the advertiser the right to have their ads shown above affiliates or display url pirates” my understanding of Google’s policy is that they (Google) do NOT prioritize the merchant URL - in fact, if an affiliate direct links (using the merchant’s tracking URL they get through Commission Junction or Linkshare as the destination URL and the merchant’s website as the display URL) then Google will show the ads with the higher click through rate without regard to who owns the website.

In response to “MSN feels it is up to the advertiser to monitor their affiliate’s activities including utilizing inappropriate display urls,” my understanding is that Google has always felt that it is the advertiser’s responsibility to monitor affiliate’s activity. For instance, Google allows direct linking (even if the merchant doesn’t) and they allow affiliate ads to appear instead of merchant ads for the same display URL if that ad has a higher click-through rate.

So…anyway, I guess we will have to wait to see Yahoo’s position on this, but I expect it to be very similar to Google’s and MSN’s. It is very unfortunate that the search-engine’s have stances on these issues yet they have refused to represent and debate those views at SES - Chicago. SES is the premier and most respected forum where search-engine related issues are discussed and debated. Why not offer a representative? Why not stand behind your policy?

Clearly, one of the primary reasons for Google, Yahoo, and MSN declining SES from having a rep on the panel has to do with the fact that search arbitrage is apparently a controversial issue. However, I disagree and I strongly feel that the discussion and debate has just begun and can not be controlled solely by the higher-ups at the search-engine’s - this BIG BROTHER approach is unacceptable for multiple reasons. In general, I believe that most of the policies adopted by Google were intended for one purpose (i.e., to minimize MFA search arbitrage) but unjustly punished others, such as SEM Affiliates. Many sophisticated, professional SEM affiliates are now required to pay as much as $10 per click for a keyword that is being sold to another advertiser for 10 cents - that’s unacceptable.

While an argument can be made that MFA affiliates and traditional ( CJ / Linkshare / Azoogle) SEM affiliates are somehow the same, the argument is weak at best. In fact, in many cases the SEM affiliate is more sophisticated than the merchant at search-engine marketing. This means that a typical SEM affiliate’s keyword advertisement is more direct, the landing pages are likely to be more relevant, and the keywords selected by the SEM affiliate are likely to be more relevant. If Google is worried about user experience wouldn’t the user benefit from more relevant keyword buys, more relevant ads, and more direct landing pages? Clearly, this would lead to a better user experience (user being defined by a person who uses Google to search for products or services) than if the merchant was bidding on more general, or non-relevant keywords with poorly written advertisements. Does Google have to throw the baby out with the bath water? I argue not. Google and other’s NEED TO DRAW A LINE IN THE SAND BETWEEN MFA AFFILIATES…OR WHAT I LIKE TO REFER TO AS GARBITRAGE AFFILIATES…AND LEGITIMATE, SOPHISTICATED, PROFESSIONAL SEM AFFILIATES.

I will be arguing these issues among SEM agency colleagues next week..without the presence of the major search-engines. However, I will provide that needed voice to affiliate marketers and I will also debate these issues with an open mind about where our industry is as it relates to search arbitrage issues and where it is going.

See you next week in Chicago.

This entry was posted on Wednesday, November 29th, 2006 at 5:57 pm and is filed under Uncategorized, SES - San Jose 2006, search-engine marketing, affiliate marketing, internet marketing, marketing, new marketing technology. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.