eBay and Yahoo have both recently changed how they pay the Publishers in their ad networks.  The eBay Partner Network was a CPA-based affiliate network, up to this point.  Their communications both talk about payout being based on the “quality” of the publishers traffic.  Quality as determined by their algorithms.  TechCrunch writes up the Yahoo Publisher Network changes here.

One pitfall to this approach is that there’s no transparency into what “quality” traffic means.  Publisher’s may see their payouts change, but they’ll have no idea why.  A benefit of working with affiliate networks is the transparency in seeing the actions on an Advertiser site driven by a Publisher, and the payment associated with that action based on the agreed terms.

Changes like these put Yahoo and eBay at risk of losing Publisher site space to Google (AdSense) and other ad networks.

While most of the focus has been about the battle in search,Publisher Networks also are key competitive arenas for Yahoo and Google, as well as eBay and Amazon (with their Associates program).  The advantage Google has in search carries over to their Publisher networks, due to the network effect.

“Think of us like an e-commerce business,” says Keith Rabois, Slide’s vice president of strategy and business development.

Internet Start-Ups Diversify Their Business Models – WSJ.com

Keith Rabois of Slide means e-commerce in terms of virtual goods. This may make sense internationally, especially Asia, but is a pretty big bet on an uncertain market in the US. Their main competitor, RockYou, defines itself as follows-

“We are not a widget company. We are a distributed media company,” says Ro Choy, chief revenue officer at Rock You. “The reality of our company is that we were not a widget company. We make money through our relationships with advertisers and partners.”

So we’ve got an ad company vs. an e-commerce company that sells virtual goods. I like the idea of Slide positioning itself in between an actual transaction but don’t know if virtual goods will be a break-out market any time soon in the US.

The Yahoo-Microsoft deal is finally sealed.  The first part that jumped out at me is the 10 year agreement.

10 years is a LIFETIME in search.  The market is going to change, and this partnership does not guarantee a long-term, formidable Google competitor.

If Yahoo and MSFT don’t enhance their core product to improve the customer experience they will continue to lag behind the market leader.

What could the next 10 years bring?

• Smarter inclusion of image and video in search results.  Video and image search are still in their nascent stages.
• Inclusion of audio in search
• Far more personalized results
• Social results, what your friends clicked on
• Move towards the CPA model

It’s a big partnership, but the game is still far from over!

There’s a post on Search Engine Journal about a new Amazon policy of not paying out commission to Amazon Associates who drive a referral (sale) using a “shortened” URL. The post focuses a lot on implications to social media marketing, but it may be about something different – PageRank and natural search.

Amazon leverages it’s inbound Associate links improve its PageRank, which determines natural search listings.  I’m not an SEO expert, but another post at SEJ talks about how Amazon uses a 301-redirect “bot” to change affiliate links into a more “natural” type of link and pass PageRank.

If Amazon commissions on shortened link it leads to a slippery slope, that over the long term could jeopardize an important value of their vast Associate program – improving Amazon’s natural search results.  This is not a decision about social media as much as natural search and affiliate links.

The question of affiliate links and PageRank/SEO is a fun debate I’ll delve into in more detail in a later post. The big question – does the fact a Pubilsher is using an affiliate link compromise their objectivity?

Inside AdWords: Conversion Optimizer is now available to more campaigns:

Speaking about the need to own the entire consumer journey- Conversion Optimizer is an attempt by Google to integrate with advertisers to gain conversion data.  It also helps advertisers more efficiently spend their advertising dollars by automatically adjusting their CPC bids based on conversion history.

The more data Google has on conversions the better they could make ALL of their ad products.  Today they live and die by the click, but that’s bound to change someday.  This is an important feature that could add value to their core business – advertising.

Affiliate Window Blog » Affiliate Multi-attribution Model Discussed:

This is a blog post from a UK affiliate network about attribution and the “last click wins” model of affiliate marketing.  This means that the site that the consumer last clicked through before completing an action (usually a purchase) gets 100% of the advertiser commission.  Attribution refers to the question of how to credit for the action.

The attribution question in CPA advertising/affiliate marketing is a big one – and an important question in online advertising as a whole.  How do advertisers spread their marketing dollars equitably across the different sites that generate customers?  And how do Publishers get compensated fairly for their marketing efforts?

The ideal ad system would pay based on the impressions, clicks, and actions that all let to a consumer purchase.  Impressions drive brand awareness, clicks drive research, and actions close the sale.  Each of these steps is a part of the same consumer story.

Let’s say I go to the NYTimes.com on 7/1 and see an ad for a summer sale at The Gap.  It registers in my mind.  On 7/3 I do a search for “gap coupon” on Google.  I see a few good offers, click through a few to research, but don’t buy anything.  But – each click takes me closer to the completed action.  The next day  I stop at a Gap store and try out a new suit.  It feels right, I like the style, but then remember the coupon that I saw online.  I write down the product details at the store.  When I get home, I repeat the “gap coupons” Google search and click on a site.  From this site, I click through a 10% coupon to Gap.com.  When I get to Gap.com I input the product details, find the suit, and apply the 10% discount at checkout.  The last click gets paid the full commission amount.

In this scenario the consumer path is spread across numerous sites, but these sites are all part of different, closed networks.  They don’t talk to each other and therefore cannot be tied back to the same consumer story.  It’s still early, we’ll see how the online ad industry innovates to compensate based on the consumer journey.