April 24, 2013, 3:01 PM

Google plans for life after the Google Affiliate Network

It’s focusing more on Product Listing Ads and other advertising services.

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With Google Inc. planning to cease operating its Google Affiliate Network effective July 31, the company says it is focusing more on its other marketing tools including Product Listing Ads, its Conversion Optimizer paid-search bid management tool, and ads placed through its AdSense program. “These areas are growing rapidly, and we’re continuing to invest in them,” J.J. Hirschle, head of the Google Affiliate Network, says in a Google blog post about terminating the network.

The Google Affiliate Network, ranked second among affiliate networks in Internet Retailer’s Leading Vendors to the Top 1000 E-Retailers guide, operates on a cost-per-action (or acquisition) basis, meaning advertisers pay for web site clicks only on ads that result in an intended action, such as a consumer purchasing an advertised product or signing up for a loyalty program. But this kind of marketing has rapidly evolved in recent years, Hirschle adds, leading Google to focus on other product it says will offer greater performance and value to advertisers.

Indeed, other Google products like Product Listing Ads in particular had begun to surpass the Google Affiliate Network as a more effective tool for advertisers, says Eric Best, CEO of Mercent Corp., a company that helps retailers sell through Google and other online marketing channels.

“In terms of revenue for retailers and for Google,  Product Listing Ads have overshadowed the Google Affiliate Network,” he says. With Product Listing Ads, which appear with product images in Google search results, merchants have more control over what they’re advertising and how they’re advertising, he says.

While the Google Affiliate Network is strictly a cost-per-action model, for example, Product Listing Ads offer advertisers the flexibility to control which ads appear on sites and to choose either cost-per-action or cost-per-click, paying a small fee for each click on an ad. Product Listing Ads also allow advertisers to bid on negative keywords, which prevent their ads from appearing when consumers search on particular terms. A luxury apparel retailer, for instance, might buy the negative keyword “cheap dresses” to prevent its Product Listing Ads for designer dresses from displaying when bargain-hunting shoppers search for cheap dresses.

Best adds that Google’s success with its AdSense program, which allows the operators of web sites sites of all kinds—including retailers but mostly information and entertainment sites—to  earn fees for hosting ads, also appears to have made the Google Affiliate Network an unnecessary channel for Google. “Ultimately, the Google Affiliate Network was about monetizing third-party web sites, but Google already had a mature way to monetize third-party sites on AdSense,” he says.

Advertisers trying to figure how to replace the Google Affiliate Network in their advertising budgets should consider multiple options, Best says. “Merchants should look at advertising techniques where they’re already dialed in well and getting good returns,” he says. That can include advertising on Amazon.com and other e-marketplaces as well as increasing use of Google’s Product Listing Ads and remarketing ads in the Google Display Network, he notes. Google remarketing ads targets consumers who visited a retailer’s web site but did not buy; the remarketing ads for products the consumer viewed then appear on other sites that the consumer visits within the Google Display Network of sites.

Advertisers can also still reach large groups of affiliates through other networks including Commission Junction, ranked first in the Leading Vendors guide, and Rakuten LinkShare, ranked third after Google.

Google launched its affiliate network in 2008 after acquiring DoubleClick Performics and renaming its affiliate network the Google Affiliate Network.

Advertising with Google Product Listing Ads will be addressed at the Internet Retailer Conference & Exhibition 2013 in Chicago by Darren Baldwin, manager of e-commerce at web-only work wear retailer Dungarees.net, in the session “Searching for success with the new Google Shopping.”

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