Part 1 of 2
Do you allow affiliates to promote your programme via PPC?
This will depend on what you are looking to achieve in your overall search strategy. Your aim might be to attract customers away from your competitors, build up awareness of your own brand, or push a specific campaign. The extent to which you work with PPC affiliates will depend on your representation in the paid search space at present. How do you rank on key brand and brand + generic terms? Is this the same across all search engines? More broadly, where does your product or service stands in the market at present? For example, advertisers in the finance, mobiles and utilities sector all offer similar products, and many consumers view price as the only differential. Contrast this to a fashion house that sells only its own products and partners with resellers to distribute them.
Budget has an important bearing on every paid search campaign. An affiliate network can offer access to a trusted selection of large, experienced PPC affiliates with big budgets who will be prepared to work on a CPA rather than a CPC basis. Running some (or indeed all) PPC activity through the affiliate channel can shield wary advertisers from the inherent risks of spiralling acquisition costs on CPC campaigns.
Can affiliates link directly to your site?
Advertisers facing competition in the SERPs for either brand or generic terms may want to enlist the help of affiliates to cover off terms which they themselves, or their agency, cannot. The ability to direct link on these will boost conversions. It is possible that affiliates can convert long tail generic keywords better, on a higher EPC, or get better positioning than the advertiser themselves. Many voucher code sites convert brand + voucher code searches better than the advertiser, for example. As such, you might wish to grant affiliates direct linking rights on these specific terms.
However, as Google and Yahoo only allow one ad per SERP to use the same display URL, advertisers risk effectively bidding against their affiliates and causing CPCs to rise for both. To manage this, advertisers should stipulate which keywords they are happy for an affiliate to direct link on and which they themselves will cover.
Can affiliates use your brand in the ad title, ad text or display URL of their ads?
In considering whether to allow affiliates to use your brand in their ads you should ask what results the user is likely to have returned with their searches. Someone looking for your site might be confused if they are presented with more than one ad using displaying your brand, but on the other hand, given that the use of the brand in the ad will add consistency and help improve conversions, this might distract users from the ads of competitors which display for the same keyword(s). Competitors may try to take advantage of the fact that Google does not restrict bidding on trademarked terms itself, and has recently also removed restrictions on the display of trademarked terms in ad text.
Are affiliates allowed to bid on your brand terms?
The most common argument for not allowing affiliates to bid on their brand is that these sales would have been made anyway, as searching on a brand term is a good indication that the user wants to go to that site. This is a legitimate argument and there are very few cases in which paid search on brand yields incremental sales. But advertisers should think of the decision to give affiliates brand rights as a strategic one based on conditions in their market – specifically, the competitiveness of the search space and the competitive position of their product or service.
Again, what is the user’s experience at present? If advertisers run their own ads and no competitors are present users will have little trouble finding what they have searched for, and so there is little reason for affiliates’ ads to appear in this space as well. This may not be the case on all search engines however, and affiliates can be used to plug these gaps. Equally, for brands that lack recognition in a competitive market affiliates can advertise, perhaps below the advertiser, to squeeze out competition and achieve better coverage of the search results.
Indeed, where competitors are actively bidding against your brand a certain amount of customers will search for you but end up at a competitor. This is particularly the case in competitive markets. If Easyjet were to bid on its rivals, a significant proportion of users searching for ‘ryanair’ will end up transacting on the Easyjet site, for example.
If an advertiser’s brand is closely associated with a generic keyword competitor ads are likely to appear in the search results due to broadmatching. Users searching for an Egg credit card, for example, are unlikely to search on ‘egg’ but ‘egg credit card’. In these casses, affiliates could be tasked with bidding on these brand + generic terms and giving them the right to use the brand in the ads will improve click-through rates, relevancy and therefore ultimately lower click costs whilst pushing competitors down in the rankings.
Are affiliates allowed to bid on mis-spellings of your brand?
If an advertiser does not allow brand bidding it is common to also forbid affiliates to bid on mis-spellings of the brand. However, for major brands this is increasingly unnecessary as the search engine is likely to recognise a mis-spelling and provide an automatic correction. For advertisers without a well-known brand however this might not be the case and if competitors are persistently active on mis-spellings it would be reasonable to conclude that this it profitable for them, and that a certain proportion of customers that would otherwise have converted for the advertiser are being converted with a competitor.