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Are Adsense Getting into the Affiliate Marketing Game?

I’ve been pondering the Adsense decision to get into the referral business this morning since hearing the news. There are a number of questions and directions that my mind has taken with it. Bear with me as I think out loud for a few minutes:

Who is left to Refer? – My initial reaction to the announcement was that it’s a nice idea – but who would I refer? It’s probably the blogging circles that I hang around in – but I’m scratching my head to think of too many online publishers who are not already with Adsense. Some of them are inactive of course – but most seem involved already. Over the past few years Adsense has saturated the contextual advertising market brilliantly – to the point where a referral program at this point kind of seems somewhat pointless.

Response to Competition – Is this move more about a response to competition than anything else? YPN is rumored to be coming out of beta in the coming month or two and many believe that they’ll have a referral program of their own. Chitika’s referrer program has caused some real buzz (check out the latest graph for the word chitika at blogpulse) – While Adsense might not recruit too many more publishers at this stage – their competition stands a lot to gain from such programs (as do those who promote them). Is this an attempt at diffusing some of the attention of these new programs?

Sign of Things to Come? – As I pondered this morning and read over the Adsense policies around the referral program I found myself wondering if this might actually be something a little bigger than just a referral program for Adsense. Check out some of the wording in their reference to the referral program (emphases mine):

• ‘With our new referrals feature, you can increase your revenue while increasing your users’ awareness of useful products and services.’

• ‘A single referral button per product may be placed on a page….’

• ‘You can begin referring users immediately – just visit the Referrals tab within your account, choose the product and the referral button you like best, and add the associated snippet of code to your site.’

Notice anything?

What I notice (or perhaps I’m reading too much into it) is that their wording could apply to the current two options for referrals that they give (ie the Adsense one and the Firefox/Toolbar one) or it could equally be worded that way for additional referral programs to be added.

Could Adsense be preparing to roll out other referral programs in in doing so be entering new territory – ie that of affiliate marketing?

How difficult would it be for Adsense to extend their referral program not only to their own two products but to those of other companies. When we log into the Referrals page in Adsense will we one day see more tabs besides the Adsense and Firefox ones? Perhaps there will be an iTunes one or a bookstore one….the options are limitless. In a sense this would see them competing with affiliate programs like Commission Junction or Linkshare who act as middle men between publishers and companies – paying out commissions for a variety of conversion results.

Could what we’re seeing being rolled out right now be the first round of many referral products by Adsense?

About Darren Rowse

Darren Rowse is the founder and editor of ProBlogger Blog Tips and Digital Photography School. Learn more about him here and connect with him on Twitter, Facebook, Google+ and LinkedIn.

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Comments

  1. Sean Fallon says:

    The wording does seem to indicate that the adsense referral program is part of a larger affiliate marketing strategy.

    Who would be better than Google, the king of advertising, to develop a referral program like the one you mentioned? In fact, I think Google is planning on extending their advertising reach beyond the internet. Possibly into the world of targeted television advertising. Or so I have heard.

  2. HostingDiary says:

    Well they are already doing cpc and cpm so a cpa model isn’t much suprise. I haven’t heard about the tv thing but they are already doing print.
    Andrew

  3. Rich Miller says:

    I think you’re right on the money, Darren. JenSense and others have written about how the magic “smart pricing” formula for AdSense favors clicks that are most likely to add to sales. This is forcing the domain advertising industry – which has long been based on Google and Yahoo pay-per-click ads – to begin shifting to a pay-per-action model. Lots of folks noticed the The New York Times story last Sunday about Google’s ambitions in advertising. If AdSense’s smart pricing favors quality clicks that lead to sales, it makes sense for Google to seek the most direct and profitable way to monetize that bias – which would be an affiliate program.

    Commission Junction and the other affiliate networks will be toast soon.

  4. Refferels just came live 5.30am UK GMT

    Basicaly they have images for all languages, pretty lame stuff since it will attract awarness to your adsense maybe decreasing money, plus its really only suited on sites where people earn big, don’t bother sticking it on a teen site.

    I wont be using the feature however i think its capped to $100 per refferl per month if the publisher earns $100 for example you earn $100.. i dont know for sure if they mean , $1000 you earn $1000 but that would be stupid.

    :) enjoy replacing chitika ads.. which do crap for me.

  5. Brad D. says:

    Adsense is everywhere. A referal program is a “why not” at this point.

  6. eszpee says:

    I don’t want to argue with your conclusions, just a small addition:

    “Who is left to Refer?” – non-English speaking countries. Here in Hungary for example there are almost no sites running AdSense. No wonder they started with all the supported languages I think.

  7. Jojo says:

    I had yesterday in only 4 hours 10 clicks and 3 referrals. So I think this might be the way to earn some money with my german internetmarketing blog. ;-)
    I don´t think we will see Google in the affiliate business, but maybe they will use this referral programm to advertise more Google stuff like Google Desktop or Google Talk.

  8. Darren, i read some of google your “Recommended Income Streams” may be violating TOS of google Adsense.

    Incentives

    Some of this section has been reworded to include “referral buttons”, and the following has been added:

    Publishers are also not permitted to use deceptive or unnatural means to draw attention to or incite clicks on referral buttons.

  9. Who is left to refer? Don’t forget there are newbies coming online each and every day. They’re going to find their way to the pros and would likely sign up from a site that is an authority. They also have an opportunity to be successful faster since there are so many tools and tips for them to choose from.

  10. ChrisH says:

    Yeah I agree with Densie. Which means the referral program could be a boon for pro-bloggers since they’ve got the credibility so their recommendations are more likely to be acted on.

    Even though I use referral programs, what worries me is the life-expectancy of the click. Just because Joe Blow clicks on your referral, how do you know if he decides to sign up next week, you’ll still get the credit?

  11. ChrisH says:

    BTW Can anyone tell me what’s different about the new Adsense terms? Would have been nice if they had’ve highlighted the changes.

  12. yeah google suck for that…

    your not allowed to do what darren has done in his site with the “revenue streams” it influences people to click on it.

  13. ChrisH –
    Jensense does a good job of showing the Adsense term changes here:
    Jensense: Full rundown on new Adsense Terms

    Cheers.

  14. Matt says:

    I have something of a complaint about AdSense, since we’re talking about them anyway. It’s maybe a bit off topic. Forgive me in advance for that. I have been an AdSense publisher for 4 full months now. My AdSense earnings in that period are just over $30. Okay, I know, I know… it’s not much. But it’s what I’ve made and I’m proud of it as I’m sure my earnings will grow. Now, I have also joined the Chitika program, which I put on my site on October 3rd. In that time, I have made just over $24.

    Here’s what annoys me. This will be my first month with Chitika, so I don’t know what audited revenue will be like, but I assume from what Darren said about his first months from them, that I may lose 10% of my earnings, give or take. That’s fine. I will still get more than $20 from them. And they will send it to my PayPal account this month sometime because I am over the $10 threshhold.

    Google, on the other hand, has a threshold of $100 for payment to occur. God knows how long before I see a payment from you AdSense. (For one thing, the AdSense targeting on my site has gone to crap this month for some reason, and despite implementing every idea I’ve come across to try to improve it, I’ve only managed to do so marginally, but that’s another story.) Anyway, I’m sure it saves Google a ton of money not to have to pay the little guys who never get to $100 and give up on the idea of trying to make money on the net, but really… it’s still wrong. They still displayed the ad and got a click, which Google certainly got paid for. There’s no reason why they should hold their money for so long. I thought one of the tenets of Google’s business was “Don’t be evil”? Well, I feel like this policy is evil.

    Just thought I’d share.

  15. ChrisH says:

    Thanks heaps, hob. :)

  16. Hock Ng says:

    The fact that Google is pushing Firefox point to the larger war between Google and Microsoft. This looks like an effort to edge out Internet Explorer and since Google doesn’t have a web browser product, they’ve partnered with Firefox.

    You are correct in pointing out that this is just the tip of the iceberg. I can envision Google promoting their other products using affiliates. Gmail is a good example. If Google were to offer incentives for signing up people to use Gmail, that would be a launching point in the battle against Yahoo and AOL.

  17. Dennis says:

    Hock Ng put it well, I thought it amusing that Google is paying people to refer users away from Internet Explorer by paying a dollar to use Firefox. Maybe a strike back at Bill Gates comment about gmail? Hmm.

    As far as who else to refer? There are plenty, believe me. I referred an associate a few months ago, got nothing for it except his gratitude. I referred one of my affiliates recently also that claims to have 100,000 uniques a week or so, but never had AdSense on his pages even though he had lots of other advertising banners. Got nothing for that one either. And as was said before, there are new web site owners coming on board every day in droves.

    Reminds me of what I thought when I joined the eBay affiliate program, with 70 million registered users or so already, who is there to refer (especially considering eBay is a household word and people go straight there as soon as they buy a computer, rather than surfing through other sites first to find an affiliate link). Yet I still get signups every month through my links.

  18. Jonathan says:

    It maybe worthwhile to consider future Google acquisitions. With their monster cash pile, they could quite easily purchase Commission Junction or LinkShare (or both!). Having that backend, would require some changes on the front end. Perhaps we are seeing that now?

  19. Scott says:

    I looked through the FAQ about the referrall program and it states nothing about placing a referrall banner on the same page as an adsense unit.

    I have placed the banner directly above my adsense units on my website http://www.usedmac.ca The thought behind this is visitors will be attracted to the Adsense banner and possibly click the ads.

    Is this against the T.O.S.? I think it may be walking a fine line but I am interested to what the CTR will turn out to be?

  20. Anthony says:

    Matt, Google pays out all publishers at the end of the calendar year irrespective of wether you reach the $100 balance required for monthly pay outs. It’s Google’s right to determine it’s business systems and processes, it discloses these at sign up via the terms if you don’t agree with the terms then don’t join their revenue program.

  21. tmtb says:

    Referrals for AdWords can be included in that ‘products’ group as well. There are tons of small businesses that could profit from AdWords, but are not using it right now. Perhaps referrals for AdWords clients are next.

  22. I connect the partner program with Anastasia web.
    My site has small PR, nevertheless they I pay each month 300 – 500 $

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