Google announces change in AdWords affiliate policy
The affiliates that highly productive -- or are willing to pay a significantly higher rate to offset lower clickthrough rates -- will appear. An advertiser who doesn’t have a high ad rank can unseat the current advertiser only by increasing its maximum CPC rate. This is because it can’t increase the clickthrough rate for that keyword because its ad isn’t being shown anymore. The affiliate that does appear must continually ensure a high clickthrough rate and/or increase the maximum CPC to keep other affiliates from appearing.
+ Parent retailers could be beaten out of paid search by their own affiliates, especially if those affiliates are more targeted in their ad description, and thus get better clickthroughs. Salar rationalized that even if the retailer is bumped out, it would still benefit from the affiliate getting the sale, but it will be cold comfort to a product manager who’s being measured on search visibility. One additional benefit to the parent retailer -- to justify higher maximum CPCs, affiliates will have to increase their conversion rates, which will benefit the parent retailers.
and from Goodman:
But it's not an all-or-nothing change. I experimented a little bit with an Amazon Associates campaign on AdWords this fall, so I feel like I understand what is likely to happen. Instead of my affiliate AdWords campaign (which I had running on a wide variety of products, not altogether successfully, but it was very educational!) simply being "shut down," it will just be cut back a bit. Where no other advertisers are clever or bold enough to appear on a given query, it will be bombs away for my ad. Where multiple ones appear, I'll only get to show my ad if I've bid high (taking a risk) or written particularly compelling copy that pulls a high CTR, or some combination of the two that makes my AdRank #1.
and Aaron has reprinted the entire email sent out to Adwords customers heh... here's the interesting bit:
What is changing:
With this new affiliate policy, we'll only display one ad per search query for affiliates and parent companies sharing the same URL. This way, users will have a more diverse sampling of advertisements to choose from. As always, your ad will be displayed based on its Ad Rank for given searches, which is determined by a combination of your ad's maximum cost-per-click (price) and clickthrough rate (performance).
For instance, if a user searches for books on Google.com or anywhere on the Google search and content networks, Google will take an inventory of ads running for the keyword books. If we find that two or more ads compete under the same URL, we'll display the ad with the highest Ad Rank.
How this will affect you:
If you're an affiliate, this means that you no longer need to identify yourself as an affiliate in your ad text. However, your current ad text will continue to display your affiliate status until you change it.
Affiliates or advertisers using unique URLs in their ads will not be affected by this change. Please note that your Display URL must match the URL of your landing page, and you may not simply frame another site.
What you should do:
We recommend that you continue to monitor your ads' performance and optimize your ads as needed to ensure they're bringing you the best results. Please visit our Optimization Tips page for more information.
By improving our ad relevancy, we believe that users will have a better search experience, which will help you reach more potential clients in the future. We'll continue to make improvements to AdWords over time to further improve the user experience and help increase the performance of your ads.
and Aaron ends with an interesting question:
>Google offers broad access to content across the web without censoring results.
Does anyone buy that Google is not forced to censor some stuff? I don't...
No, i don't either Aaron. In fact, we know that that is categorically untrue. As a broad statement though it could pass i guess...
So there you have it, all change for Affiliates at Adwords and some mixed predictions of how this will affect people. I guess we just wait and see how this begins to affect both the Adwords and Advertisers when it comes into effect...