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  1. #1
    Manager - Affiliate Marketing Patrick Vesperman's Avatar
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    PPC bidding with In-house PPC
    We have an in-house PPC expert optimizing for hundreds of keywords. About 20 keywords represent roughly 95% of our traffic and we don't want to lose that. However, we are starting an affiliate program and I don't want to turn affiliates away by posting 20 non-trademark keywords on the do-not-bid list. How should I handle this issue?

    I fear by not protecting some of our highest keywords, we will cannibalize or PPC efforts. We have a very good quality score on these words and convert well.

    Suggestions?

  2. #2
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    It's great that you're trying to think carefully about this before launching a program; too many new merchants neglect this and end up making multiple policy changes (often accompanied by hostile emails to all publishers).

    One reasonable compromise: you can prohibit "direct-to-merchant" PPC bidding (either entirely, or just for your listed terms), but still allow publishers to bid on some (non-trademark) terns or on all of those terms to bring traffic to their own sites (to something more than a "thin affiliate page," which is prohibited by Google anyway).

    Remember that when you block your publishers from bidding on your best keywords, this leaves more opportunity for PPC ads promoting your competitors (and the publishers carrying their advertisements).

    Also, by publishing your list of your top 20 keywords, you're giving your competitors (and their publishers) valuable information, too. If you have identified successful keywords that aren't well-recognized as such in your industry, think twice before adding them to your "do-not-bid" keyword list.

    You should also recognize that if your "do-not-bid" list seems unreasonable, then some publishers (who think it's "essential" to bid on those keywords to promote their own web sites) will elect not to participate in your affiliate program.

    You should also be very clear about whether your publishers can include your "do-not-bid" keywords (or your trademarks) in their page titles, headings, or meta-tags, or in other SEO efforts. Again, some publishers might view this as "unreasonable" for non-trademark terms, and may elect not to carry your advertising at all.

    Finally, and perhaps most important: policing and enforcing PPC keyword policies is a huge undertaking, requiring many hours of staff time and/or payments to an outside monitoring agency. The cheaters and parasites have adopted some very, very clever techniques to conceal their bidding violations. If you adopt a policy but don't vigorously enforce it, then your honest publishers will be very angry when they see dishonest publishers profiting by breaking your rules.
    Last edited by markwelch; July 7th, 2009 at 03:07 PM.

  3. #3
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    You can ask your affiliates not to bid more than X on certain keywords.

  4. #4
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    > "You can ask your affiliates not to bid more than X on certain keywords." <

    This was a common strategy that was effective in the days when GoTo/Overture ranked keyword ads by fixed bid amount, and disclosed the amount of each bid. It's much less effective today.

    A "bid limit" is difficult to enforce, because nobody ever knows exactly how much someone else is bidding for a keyword through Google AdWords.

    Suppose the merchant has a policy prohibiting publishers from bidding more than fifteen cents on listed keywords. If the publisher's web site is well-optimized for a keyword, and uses effective language to draw a high clickthrough rate, then the publisher might draw a preferred position with a ten-cent bid, while Google AdWords may perceive the merchant's own web site as less relevant (or less effective at drawing clickthroughs) and require a thirty-cent bid to surpass the publisher's ad position. To the merchant whose 20- or 25-cent bid doesn't raise its ad position above the publisher's, it would appear that the publisher is over-bidding.
    Last edited by markwelch; July 7th, 2009 at 03:27 PM.

  5. #5
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    A philosophical note on PPC bidding policies:

    Some merchants set quite different standards for their PPC advertising, compared to affiliate marketing. For example, a merchant might pay publishers a ten percent commission on all sales following an ad clickthrough, but the same merchant might charge its PPC staff or agency with maintaining a spend ratio of 1:4 (spending no more than $1 for every $4 in sales generated) -- and of course the staff salary or agency's fees are not included in the computation. Effectively, the merchant is allocating a 25% to 35% margin for PPC, but only 10% to 15% for the affiliate program.

    Even with this huge margin advantage, the PPC staff or PPC agency will complain that publishers are "unfairly" competing with their own PPC bidding. What they're really complaining about is that the publishers are more effective and efficient than the people running the PPC campaign.

    Many merchants adopt the philosophy that if a publisher can earn profits from PPC marketing (either direct-to-merchant or to the affiliate's own site), then the publisher should be allowed to do this, because the net cost for the merchant is lower (and in the end, more customers come and buy more stuff for more money).

    In my opinion, merchants need to identify their affordable "margin allocated to marketing," and stick to that number in all their marketing efforts. Thus, if the merchant decides that it can spend 30% of sales on marketing costs, and manages its PPC campaigns at a 4:1 (25%) ratio, it should not be offering only 4% or 6% to publishers. (I'm not suggesting that the affiliate program pay the full 30%, just that the program not be crippled with an irrationally low rate.)

  6. #6
    Half a Bubble Off Plumb RemodelingGuy's Avatar
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    Quote Originally Posted by Merchant Consultant Team
    You can ask your affiliates not to bid more than X on certain keywords.
    Disclaimer:

    PERSONALLY, I think that each and every one of you merchants that prohibit your affiliates from bidding on targeted keywords that compete with you are a bunch of .....

    ... I have a few words in my head.. None of them flattering..

    Don't start an affiliate program, that depends on hard working people to promote your brand and your products, if you limit their capabilities to do on line promotions and make a "cough" PROFIT!...

    PPC costs money and should NOT be limited.

    Jimmy McDonald - Your Local Hard Working RemodelingGuy ( & SprinklerGuy - & GarageGuy )
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    We're Bettering YOUR Life by Improving Where YOU Live It ...
    Do What You LOVE & LOVE What You Do! ....

  7. #7
    Manager - Affiliate Marketing Patrick Vesperman's Avatar
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    Good stuff Jimmy and Mark...

    It is tricky from my point of view however. I am trying to convince the powers that be in our company that an affiliate program is worthwhile AND incremental. At the same time, we are spending a lot of on PPC ourselves and, for good reason, don't want to undermine that effort.

    While I certainly don't want to limit our affiliates, how do we protect what we do. We are good at PPC and have a pretty solid strategy.

    I completely understand your point Jimmy and agree, but I am in a tight spot with this and will have to come to some sort of compromise for this program to fly.

  8. #8
    Half a Bubble Off Plumb RemodelingGuy's Avatar
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    Am I completely freaking ignorant, or wouldn't you prefer to have these hardworking affiliates above and below you on Google, instead of people that you have no real relationship with, that are using the very same keywords that you have prohibited your PARTNERS from using??????

    Is it me????

    Jimmy McDonald - Your Local Hard Working RemodelingGuy ( & SprinklerGuy - & GarageGuy )
    StartRemodeling.com .... MySprinklerGuy.com .... MyGarageGuy.com ....
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  9. #9
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    That's great feedback: if publishers outbid you with their own PPC campaigns, that will simply reduce your PPC costs while also shifting the risk from you to the publisher. If the publisher is successful, you'll have increased sales at reduced cost and reduced risk.

  10. #10
    Manager - Affiliate Marketing Patrick Vesperman's Avatar
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    Quote Originally Posted by RemodelingGuy
    Am I completely freaking ignorant, or wouldn't you prefer to have these hardworking affiliates above and below you on Google, instead of people that you have no real relationship with, that are using the very same keywords that you have prohibited your PARTNERS from using??????

    Is it me????
    Of course not - that is why I came here for advice instead of just doing it and making a mistake


  11. #11
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    Don't you think by posting your top 20 keywords, some affiliates may use your kws to promote other merchants in your niche. Within a narrow niche, if some kws convert well for Merchant A, they shd convert well for Merchant B.

    I always look at multiple merchants' kw list, if available, in the same niche to come up with kw ideas to expand on/bid on, even if I am just promoting one merchant in the niche.

  12. #12
    Manager - Affiliate Marketing Patrick Vesperman's Avatar
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    Quote Originally Posted by sam_park
    Don't you think by posting your top 20 keywords, some affiliates may use your kws to promote other merchants in your niche. Within a narrow niche, if some kws convert well for Merchant A, they shd convert well for Merchant B.

    I always look at multiple merchants' kw list, if available, in the same niche to come up with kw ideas to expand on/bid on, even if I am just promoting one merchant in the niche.
    Great point; however, I am not suggesting posting 20 keywords...I am looking for ways to make this work without sacrificing direct sales and undermining our PPC efforts.

  13. #13
    Manager - Affiliate Marketing Patrick Vesperman's Avatar
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    I understand that from an affiliate's point of view, no restrictions are the best...but is it the same from a merchants point of view? I have yet to be convinced, but appreciate all the feedback!

  14. #14
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    Quote Originally Posted by pjvesperman
    we are spending a lot of on PPC ourselves and, for good reason, don't want to undermine that effort.

    While I certainly don't want to limit our affiliates, how do we protect what we do. We are good at PPC and have a pretty solid strategy.
    Here's the thing, you admit that you spend a lot of money on your in house ppc program and you don't want to limit your affiliates. I've seen this a million times before. How much do sales generated by your affiliates cost you? The answer is ZERO, you don't pay them unless they get a sale. They are paying all their ppc costs on their own in hopes of getting conversions for you. Even when they get a sale, I guarantee you're paying them a lot less then you're allocating to your in house program. So, what's better:

    1.) Spend your own money in hopes of getting conversions with your own in house program, (which means not only your money, but your time and that time could be better spent improving products or websites or anything else to help conversions).

    2.) Spend none of your own money and have 100 ppc affiliates bring you sales. You only pay for the sales in this case and it will always be less then you pay for your in house program.

    I know you have 20 good keywords, but honestly that is nothing to a large ppc affiliate. You would be best served to shut down your in house and focus on providing your affiliates with all the resources they need to succeed. I would even go so far as to give them all your converting keywords and watch your sales go through the roof. Let them fight with each other and you benefit by stepping aside. There is no in house program in the world that can compete with 100 even half decent ppc marketers. The inhouse program can't think of everything and will not take angles that other ppc marketers will, simply because they can't think of everything.

    Don't look at it as losing an in house program, look at it as building an army of ppc marketers who will bring you far more sales then your in house ever would.

  15. #15
    Super Dawg Member Phil Kaufman aka AffiliateHound's Avatar
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    I love this thread.

    Why cannot more merchants understand this?

    Jimmy, PPC-Coach, Sam_Park, and Mark SPEAK THE TRUTH!

    Merchants: Read, Understand, ACT.

    Help your affiliates, instead of sabotaging them.
    Since June 10, 2012 a vegan aarf but still writing the Hound Dawg Sports Blog
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  16. #16
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    If an affiliate bids on keyword X, and X happens to be one of those top 20 keywords that you're also bidding on, then it means you are receiving MORE traffic from keyword X than you were before.

    In fact, you're not only receiving more traffic, it's very likely costing you less than it would have since you're only paying for actual sales on the % of it driven by affiliates.

    Of course the in-house expert doesn't want competition from people who can make it profitable working on commission...if the affiliates are successful enough, there's less need to keep him around.

    I will tell you that if I'm comparing several affiliate programs, and they all pay about the same and have similar cookie expirations, I would filter out the one with silly bidding policies. Lots of merchants are able to have in-house ppc and an affiliate program co-exist...yours should be able to do that, too.

    Keep the trademark keys for yourself, let us bid on everything else.

  17. #17
    ABW Ambassador ToughTurkey's Avatar
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    Bookmarking this thread for future reference. Some great arguments being made.

  18. #18
    SEO: A Specialty - Web Design: Slow or outsourced andbeyond's Avatar
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    If your quality scores are that good. And you setup the campaigns right... There is no real reason to worry.

    You will still get traffic, maybe less directly but more longterm.

    And you can publicize your affiliate program and get several hundred links to that page and more attention. More things happening means more traffic in general.

  19. #19
    Manager - Affiliate Marketing Patrick Vesperman's Avatar
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    Thanks Mark, Jimmy, PPC-Coach, Sam_Park. Very good thoughts. We have decided to not limit our affiliates, but instead team up and conquer Google, et al together!!

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