aeiouy - 3:13 pm on Jun 10, 2007 (gmt 0)

The rationale for this change is clear: on the Internet, there is no need for a middle man.

That is just not true. Apparently you don't understand how and why Affiliate marketing works. The middle-man is there because the retailer wants them there. They can spend a fixed amount of money PER SALE in marketing. That is any business owners nirvana. There is actually a huge need for middle-men, as the online process for marketing products becomes MORE complex. Changes like this just make it worse. Retailers also become frustrated and they stop managing their own campaigns or cut back and simply pay others a fee or percentage to bring in the customers.

This is even more true if you are Google who have all the resources and data to cut out the middle man altogether.

Google is a massive middleman themselves. What is Adsense but Google being one big middleman. People used to go out and get their own advertising deals. Now most small websites just throw up adsense and under-monetize their site. Google is filling that middle role. Same goes with Affiliate marketers on Adwords. A good affiliate can improve the experience for both the retailer and customer by putting them together.

In order to stay competitive, the middle man needs to be cut out as he is only grabbing money along the value chain without adding value.

You have never successfully done any affiliate marketing have you? My value to the retailer is they get a customer for a fixed amount of money. My value to the consumer is I am able to find them and led them to the retailer for something they were interested in or became interested in.

(And this, dear friends, is a risk for Google as the presence of a middle man clearly indicates an inefficiency of the system. As soon as someone comes along who removes the middle man, they are out of the game.)

And in this case the middleman won't go away because the major inefficiency is at the hands of the retailer and most are not going to focus on blanket ppc marketing skills, when they can be guaranteed a return on their marketing budget. Some will do it, and do it well. Some will try and fail miserable. A lot will do both as to maximize their revenue and earnings. But the inefficiency won't go away, and Google just makes it worse the more the make their system less understandable and less managable. Changes like this will improve opportunities for affiliate marketers who have the knowledge and experience to move products on the internet.