ADOTAS — The recent news of Google Affiliate Network’s retirement comes as little surprise for many in the performance marketing space. GAN wasn’t a Google ad brainchild like AdWords — it was just a small part of the $3.1B DoubleClick acquisition — and more recent Google-developed performance products (Product Listing Ads, remarketing, Conversion Optimizer) compete directly with the same affiliate marketers taking advantage of GAN’s services.
While this move isn’t necessarily what publishers want to hear, let’s be honest: it’s not that big of a deal. Google might be the 800 pound gorilla in the technology world, but GAN was ranked 4th by affiliates based on revenue generated, placing it under Commission Junction, Linkshare and ShareASale. These networks and others will fill the gaps left by GAN’s closure, but Google’s exit from the affiliate world will have other industry-altering effects:
1. Say goodbye to the small guys
With GAN out of the picture, the next to fold will be the blind affiliate and ad networks. The affiliate space has long been plagued with a reputation for fraudulence, making way for alternative vendors to innovate, automate and shine a bright light inside a notoriously dark industry. In the wake of Google’s withdrawal, technology-focused companies will have a major opportunity to bring viable, fraud-free solutions to a lucrative market, with affiliate marketing spend expected to reach $4 billion by 2014. Soon enough, the old school affiliate networks will have to adapt, or they’ll fall by the wayside.
2. Not your grandmother’s affiliate vendor
Vendors rising to the occasion — many of which already exist — will bring technology, transparency and accountability to affiliate marketing, providing brands and agencies with quality assurances that eliminate challenges and risks too-long associated with the industry. Affiliate marketing isn’t dead, but without an image overhaul, it could be slowly pushed to the brink under the stresses of fraudulent practices like pixel shaving or unapproved network syndication. Emerging platforms that emphasize buyer-seller relationships and transparency will see a lot of business from GAN exiles exhausted by low earnings per click (EPCs). Vendors that offer additional functionality beyond affiliate management — such as real-time bidding (RTB), retargeting and audience analysis tools — will create value for advertisers and publishers alike.
3. Follow the leader
Despite garnering a continually increasing share of online ad revenues — the IAB Internet Advertising Revenue Report for FY 2012 puts 66% of revenues in the performance pricing category — affiliate marketing has a long-standing battle with legitimacy. Jaded advertisers will flock to more reputable affiliate management services, carrying their affiliate partners with them. One of the biggest issues that marketers and publishers had with GAN was Google’s lack of innovation efforts; winning top advertisers and offers will require vendors to differentiate their services and offer greater levels of product support.
At the end of the day, GAN closing up shop will not have any disastrous effects on the affiliate marketing space. For affiliates, there are plenty of other fish in the sea.
