amazon.com: terminating "paid search traffic"

Pulling the plug on May 1st

[swa66]

Amazon is stopping payout to affiliates that send them paid search traffic [affiliate-program.amazon.com]:

we have made the decision to no longer pay referral fees to Associates who send users to www.amazon.com, www.amazon.ca, or www.endless.com through keyword bidding and other paid search on Google, Yahoo, MSN, and other search engines. As of May 1, 2009, these paid search Associates will not be paid referral fees.

[2clean]

"This decision is based on our review of how we invest our advertising resources."

My understanding here is that they have their own team that will do all of this strategy or they've just saddled up with an SEO supplier that will handle it all.

[johnnie]

Apparently they just lost too much money to their own affiliates outcompeting them.

[jcoronella]

So long, and thanks for all the keywords...

[bwnbwn]

Guess they feel the pinch as well and cutting cost were they can.

Running an affilate program isn't cheap and consumes a great deal of time and manpower regulating them.

They figured it cheaper to do it themselves and keep the abuse in check.

[incrediBILL]

I think it's also a branding issue because clicking on a paid search ad that dumps you directly into Amazon implies that Amazon placed that ad, which is misleading to the customer.

[2clean]

If it is a branding thing...it took them a while to work it out.

Having seen what some affiliate's are doing, I'm guessing part of the reason for this change is not being able to find out how the heck all the affiliate's are delivering so much traffic to them.

[purplecape]

I question the assumption that Amazon was actually getting significant traffic/sales from direct-to-Amazon PPC advertising by Associates.

On the Amazon Associate discussion boards, the regulars are all people with web sites. If that's a representative sample, then those using PPC are a distinct minority.

Anyone got any real numbers on this?

(Disclosure of my bias--I am an Amazon Associate with a website, and have never used PPC advertising, whether to my site or Amazon's)

[seoArt]

Amazon affiliate commissions are so low, I don't see how anyone could be making money by promoting them on ppc to begin with.

[nealrodriguez]

they'll definitely be able to make more commission-free sales by being able to solely link ads directly to their sites; whereas affiliate traffic has to navigate through @ least one page of the site, unless you pop amazon.com in a frame or maybe a redirect; however, affiliates wont have the advantage of branding their ad with the amazon url.

[mack]

So what if you have a page about a product, and sent the add click to that page, then the user clicks to amazon? its goign to be a tricky thing for them to manage.

Mack.

[LifeinAsia]

So what if you have a page about a product, and sent the add click to that page, then the user clicks to amazon?

Isn't that exactly what they want? The whole point (I thought) is that they don't want affiliates doing PPC to send traffic directly to Amazaon's site. From Amazon's announcement (linked by the OP):

...if you place paid search advertisements to send users to your own website, and then your website displays links to www.amazon.com, www.endless.com, or www.amazon.ca in accordance with the Operating Agreement, you may earn referral fees for qualifying purchases made by users who click on your paid search ad, click through to your site, then click through to an Amazon site.

[edited by: LifeinAsia at 5:35 pm (utc) on April 6, 2009]

[Al_Anderson]

So what if you have a page about a product, and sent the add click to that page, then the user clicks to amazon? its goign to be a tricky thing for them to manage.

Mack.

I think this is related to the same issue that Google wanted to address last month. The affiliate traffic is good for amazon but there is no real value that the affiliate is adding to earn their commission.

It just ends up being turned into turnkey "Get Rich on the Internet" schemes. I suspect that the next policy to change will be eBay's commissions.

If you build a page and sell the product on that page then you are indeed adding value and earning a commission.

Of course if all of your content is dynamically built by calling the Amazon API then you are adding a different layout to the page and some different logos to go with the Amazon affiliate logo.

[mardomania]

I wonder if this has anything to do with the pending sales tax law in CA. I have read in some places that if your business is out of state, and you advertise at Google (in-state California)..then you'd have to charge your customers sales tax..that is, if this law is passed.
could be wrong here, just speculation.

[IanCP]

On the Amazon Associate discussion boards, the regulars are all people with web sites. If that's a representative sample, then those using PPC are a distinct minority.

I think you'll find a significant number who were doing PPC direct to Amazon but they generally don't participate in board discussions.

There are a lot of people using PPC for arbitrage purposes and Amazon was only one among a huge number of targets.

Anyone generating PPC traffic to their own sites and then linking to Amazon from there remain unaffected.

(Disclosure of my bias--I am an Amazon Associate with a website, and have never used PPC advertising, whether to my site or Amazon's)

Ditto myself.

[Rehan]

I wonder if this has anything to do with the pending sales tax law in CA.

I asked someone in the know and he said it was not related.

[AjiNIMC]

Quite strange, Isn't affiliate program independent of traffic sources?

As long as the traffic that is coming to you is converting whats wrong with it? Now you can have a rule saying, "You can't use Amazon.com's URL on any paid search as the landing page" is acceptable but discarding Paid traffic is not acceptable :)

Even I had thought of doing PPC for Amazon's affiliate program as for many of the keywords like the "Books name" the competition is too low and traffic good.

Aji

[zett]

According to a message I found on another board, the possibility to do arbitrage was present only in 2005. It worked like any PPC arbitrage - cheaply purchased ads promoted expensive goods (e.g. Plasma screens), and the owner of the ad got a referal fee. A screen may be $3000, and the referral would bring in 4% of the transaction value. At that time, it was possible to buy ads from Google for, say, 30 cents per click. At a conversion rate of, say, 1%, you'd do a healthy profit from this scheme:

100 clicks
@ $0.30
= $30 cost for clicks

1% conversion
= 1 customer
x 3000$ revenue
x 4%
= $120 payout
- $30 cost for ads
= $90 profit

But this opportunity vanished when in 2006 Google increased PPC cost and Amazon lowered their referral fees. This made it difficult to make money from this scheme, and that's why people dropped it.

So, Amazon is just chopping off a dead product.

[rocco]

I don't know, but I think:
Amazon wants that traffic, but they could be held responsible for using trademark bids or other stuff that would appear to lawyers as if they (amazon) had bid on it. They want an affiliate doorway page between the ad.

[iThink]

May be this is just the beginning of a new trend where major online retailers will try to eliminate all affiliates using PPC and will try to that part of marketing inhouse.

[JS_Harris]

I wonder if it has anything with the newly proposed FTC laws concerning truth in advertising.

Amazon was at the mercy of individuals as to what promises were being written into ads.

[eljefe3]

Looks like other retailers like B&N and others could reap a nice windfall from this.

[callivert]

B&N and others could reap a nice windfall from this

Why? Care to elaborate?

[frontpage]

I think it's also a branding issue because clicking on a paid search ad that dumps you directly into Amazon implies that Amazon placed that ad, which is misleading to the customer.

Its no different than what ad buyers do on a daily basis world wide for magazines and commercials. The reader or viewer never knows how the ad appeared in the content.

[QualityNonsense]

Amazon affiliate commissions are so low, I don't see how anyone could be making money by promoting them on ppc to begin with.

I have, in the past, made money sending PPC traffic direct to Amazon. Commissions were not the issue - Amazon sell $3000 TVs as well as $5 books, remember (though commission are capped).

The USP is that Amazon have an extraordinary conversion rate. It's higher than any other company I have ever sent traffic to.

The killer sending paid search traffic to Amazon was their poor-quality reporting vs something like CJ. It was a real headache to use with large scale PPC, and life's too short.

[purplecape]

The USP is that Amazon have an extraordinary conversion rate. It's higher than any other company I have ever sent traffic to.

My experience as well, comparing them to sites like B&N's, and using affiliate links, not PPC.

[swa66]

though commission are capped

Amazon commissions aren't capped for years now.

Amazon's conversion as an affiliate is a hit&miss thing if you grab enough control it can work very well (I current make about the same from Amazon and Google adsense, by balancing the odds of amazon or adsense being shown depending on the area of the site the page is from.

[LifeinAsia]

Amazon commissions aren't capped for years now.

Hmmm, perhaps you should re-read the fine print on their fee structure page:

Other terms and conditions apply. Referral fees for all Qualifying Product units that are personal computers (including without limitation desktops, laptops, and notebooks) are limited to a maximum of $25 per unit...

There are also caps on a few other items listed on their Operating Agreement.

[purplecape]

Commissions are capped on certain items--notably PCs, as you said, and electronics pays only 4%. The original post on this made it sounds as if commissions in total were capped. The $3000 TV mentioned as an example would earn $120.

[venetsian]

I'm not sure what you're bitching about after the fact that well yes it will be a bit harder now but its not the end of the world. Why don't you just use landing page redirects. The user won't even see it. (yes it takes 1 second extra load time, but its not the end of the world).

I've been redirecting people for a while now and it works fine with me. It even enables me to put all the keywords I want on the landing page so that I can get the best page quality for cheaper Ad clicks.

Venetsian.