What’s the first thing that comes to your mind when I say the 5th of May? May Day Bank Holiday? A lazy day sunbathing in Brighton or Blackpool or plonked in front of the tele?
The Bank Holiday, known around the world as International Workers’ Day, was a leftist initiative to celebrate the rights of workers and a managed economy, but this year more than ever we will witness the defeat of left-wing thought and the idea of regulated trading environments being superior to laissez-faire ones, as it will be the day the UK’s most talked-about advertising space sheds some of its remaining restrictions and becomes an almost free-for-all.
Instead of searching for a bucket and spade or a red flag when they wake up, many marketers will be switching on their PCs to see the fallout from the most historic development in the paid search marketing landscape since the launch of Yahoo Panama a year ago. From Bank Holiday Monday onwards, Google will allow anybody to advertise on anybody else’s brand name in the UK. You’re Vodafone and wish your advert to appear when somebody searches for T-Mobile? No problemo. Npower and wish to advertise on EDF or British Gas? Absolutely no restrictions – indeed, Npower are already bragging they will be bidding on their rivals’ brand names (Marketing, p.1,16 April).
Commission Junction held a roundtable gathering at their London offices on 16 April to allow advertisers, agencies, affiliates and their staff to discuss the development that they may either be anticipating or fearing, and help them formulate strategies to handle ‘G Day’.
Attending the session were representatives from publishers eConversions, Artemis8, Net Media Planet, Traffic Broker, UK Web Media, advertisers uSwitch, Lastminute, Argos and agencies Starcom, MindShare and Quantum. Present from Commission Junction were Alison Guise, Cheryl Ingram, Sallie Rance, Daniel Powel, Jason Baker and Yagmur Güven.
Dan Powel, who was Chairing the roundtable, recalled the turbulence that had occurred when Google had made similar changes in the United States four years ago. While rivals did advertise on each other’s trademarks, gentleman’s agreements also developed over time in which companies agreed not to bid against each other.
Everybody agreed Google’s Quality Score algorithm and the prohibition on using rivals’ trademarked terms in the ad copy would mean competitors would have to bid higher than the brand to attain a superior ranking in the PPC results, so there was some form of brand protection. One publisher believed there would be two types of ads on trademarks: “price attack” and “slander attack” ones. A number of people commented that comparison websites would be particularly well suited to take advantage of the changed landscape.
In terms of winners and losers, the same affiliate believed the development would benefit affiliates but not merchants or agencies. He thought affiliates would have to be deployed by the latter to protect their brands and stop rivals from attaining the top paid search spots. An agency representative echoed those views and said that, coming from an agency, “I can’t see any good news… the winners will be affiliates and affiliate networks”.
Dan believed that, if Google was not going to regulate the environment, networks and agencies would be called upon to handle disputes. It would mean “a lot more work and… having to devote more resources”. He talked about various scenarios such as CJ being called upon by Merchant A on their network to stop an affiliate of Merchant B on their network from advertising on their brand name. While there was no contract between the affiliate and Merchant A, CJ may not be able to enforce an agreement, but it could try to broker an agreement.
CJ European General Manager, Alison Guise agreed, and added the development should mean that networks will need to work even more closely with their advertisers and affiliates to ensure that objectives, procedures and so on are met. She also said networks will need to demonstrate their added value beyond just ensuring agreements between advertisers are put into place.
Although the consensus was affiliate marketers would come up trumps from the changes, one affiliate said it was likely rival merchants would disrupt closed groups, so there were threats to affiliates as well.
Whereas one affiliate thought the increased competition over brand terms may force affiliates to focus on generics and the long tail, most people were of the opinion affiliates would be paying more attention than at present to brand terms and that is where the real action would be. Another publisher raised the thought that if costs were going to spiral for brand terms and affiliates were continued to be rewarded on an exclusively CPA model, “we have to reduce our spend on generics for some advertisers”.
It was suggested if affiliates were going to be deployed to protect brand when returns were not attainable on a CPA basis, advertisers would have to consider other forms of remuneration such as CPC or percentage ad spend payments.
In terms of the motivation behind the changes, many believed it was yet another ploy, following on from changes such as automatic matching and internal site searching within Google, to enable the Big G to generate more revenue for themselves. I commented that Google had recently witnessed its first ever drop in revenue from paid search, which is by far its biggest revenue stream, and that the company’s share price had been on the wane of late, hence the need for reforms to maximise income.
The roundtable ran for over three hours and an engrossing afternoon of discussion and debate was rounded off with most people retreating to a pub near CJ’s delightful Putney location. Some of them were still discussing the impact of the Google changes when I left at 9pm!
Who do believe the winners and losers will be from the Google Adwords change? What will be the impact on affiliate marketing? Your comments are welcome below.