Ever since Google changed their policy to only showing one ad per display URL there have been A LOT of affiliate programs issuing new policies forbidding affiliates for direct linking their search engine ads to their affiliate program. Honestly I think this has been a BIG mistake by affiliate managers, and has hurt many programs.

Vinny did a great write up outlining some of the issues in his Revenews article, "Search Agencies vs. Search Affiliates". If you haven't had a chance to read his article, I suggest you do so, I would consider this one a must read for any scenarios affiliate manager.

I have been communicating with an affiliate manager about this very issue, where the company has decided to now allow people to link directly to their url in search ads, and his comments were as follows:

For now, the company had decided to take this stand. I was told that our affiliates that do search marketing are not targeting the tail end but the head. If they were targeting the tail end, I was told that we would be more than happy but that’s not what’s happening.

My response was as follows:

I think what happens is that affiliates start by testing the head to see if it can be profitable, especially on brand and misspellings, once profitability is proven than and only then are these top affiliates willing to expend resources to building out a full scale campaign that targets the tail.

Even so, if you are paying for search marketing and are paying for affiliates, if they both bring in sales they should be able to compete to see who can bring them in most efficiently for the company. All things being equal if the company and the affiliate are bidding on the same terms and driving traffic to the companies site, ie same display url, the company should have the advantage since they are earning more for the sale then the affiliate is. In this scenario the affiliate’s ad will only typically show up either on terms where the company isn’t bidding, or where the affiliate’s ads are better performing.

Once you take the ego’s of the internal search teams and the profit goals of the outsourced search marketing agencies off the table and look at things from a maximization of the company’s total sales and earnings basis, this should really be a no brainer.

Google's latest update to their quality scores also provides an additional reason why companies should consider allowing affiliate to directly link to their sites. Since Google is looking at the ads and giving a quality score rating to the landing pages, the typical content links and quick landing pages that used to work well in Google are getting much harder. Affiliates need to build out more substantial sites with higher Google PR values if they want to have sites that are considered "Good Quality" by Google. When an affiliate is linking directly to the merchant's site through the affiliate links, Google is looking at the Quality and relevance of the Company site. In most cases, this should be a higher value than the typical affiliate search arbitrager will be able to achieve on their own. So by allowing direct linking, you could be reducing the cost per click for your affiliates, thereby giving them more room to promote your company on more terms or bid higher on terms they have found to produce.

Clearly allowing direct linking in your affiliate program combines with the right search affiliates should equate to more sales for your company.

Food for thought... I would love to hear your comments!