Google Checkout & Affiliate Marketing

[Matthew Wood]

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Late last week Google Checkout (GC) launched in the UK, offering merchants and consumers noticeable benefits. The affiliate networks themselves are currently being fast tracked through the 3rd party tracking approval process, and many have now been approved.

Google have been criticised by some for not ensuring pre-approval of networks before launch, however a representative from Google on a4u has confirmed that affiliate tracking is a core feature of the product and that tracking providers should contact them at checkout-api-support@google.com to get setup and approved.

The thought process should now turn to whether GC will be a good thing for Affiliate Marketing. I am presuming below that all networks have now been approved as third party tracking suppliers with GC.

As a merchant it seems like a pretty decent deal, you get £10 worth of sales for free (no payment processing fee) for every £1 you spend on Google Adwords. Now does this mean merchants will bring a portion of Adwords activity in-house? It’s feasible, however it would probably affect agencies more than affiliates, and there are certainly ways around any immediate problems for the benefit of all parties.

The merchant could increase sales via the current promotional offer of £10 off a £30 transaction, this will potentially increase their conversions and tease shoppers who don’t buy online to do so - Sales that otherwise could have leaked through to a sales hotline or to the high street; Both these have, in the current state of play positive results for affiliates.

So how can GC be negative for the space? Well a couple of things spring to mind. First of all the potential inflexibility to add sophisticated affiliate tracking technology to GC. If GC currently only supports 1x1 pixel trackbacks, this could be an issue for discussion.

Direct to merchant PPC'ers could attract unwanted clicks from intrigued surfers in the early weeks. With the GC logo appearing on ads which have the merchants main 'business url' - whether from an in-house or affiliate campaign.

Maybe networks have the most to worry about; does GC offer an decent in-road along with adwords and analytics to launch their CPA model? quite possibly yes, however networks are always diversifying and with support not historically Google’s core competence networks should prevail, something I guess we will all watch closely. After all Google has collected years of stats which could be at their disposal through adwords, adsense and more recently analytics. Checkout could be the final piece of the jigsaw to help them create a formidable player within the affiliate marketing space! - It is important to stick to the facts however, speculation can often be dangerous!

Now I’m not an expert on Google Checkout by any means, so let’s get some discussion here, what do you as affiliates and merchants feel?

[3wdl]

Good thread Matt.

I was having this conversation with someone on Skype today (who may well make themselves known on this thread at some point). Their argument was that google are getting too much data from this further channel.

As I mentioned on another thread so far by view on it is that if it can track as well as using a merchants own shopping cart then it is MORE of an advantage to use google checkout.

Why? The checkout will be more secure and less likely to break; after all, there have been plenty of occasions when tracking has been removed by mistake from a merchant site and this is less likely to happen with google checkout.

Also - Payment processing has always been a big barrier to getting started online and hopefully google checkout will bring change in this respect and lower the price of major suppliers.

Time will tell but after all the tracking is sorted I think we could see some nice stats coming - especially with the free £10 offer that they currently have.

[BFG 9000]

The checkout will be more secure and less likely to break; after all, there have been plenty of occasions when tracking has been removed by mistake from a merchant site and this is less likely to happen with google checkout.

I'd beg to differ here - the code still needs to be in place on the merchants site - the merchant has to send it with every order xml request to google - there is still just as much room for a merchant to break it....

I do however agree with (what I think is) your main sentiment - that google checkout will be a good thing in the long run.


TTFN

BFG

[Qui Gon Jinn]

At the moment it seems like we are playing Russian Roulette. Whilst the initial adoption of Google Checkout maybe slow, it will gather momentum, then affiliates & networks will be left at the conscience & mercy of merchants to correctly insert the required coding for sales to fully track. (whether through ignorance and/or arrogancy)

As it unfolds we will gradually see how deep the rabbit hole goes for an conspiracy theorists and who is actually proved wrong & right. It's obvious I am no Google fan and have some firm opinions. However, as a whole though maybe reluctant, we all seem quite happy to accept whatever muck Google chucks at us when we should be more proactive in readdressing the balance for the longevity of affiliate marketing.

i.e. Nos 1 of Many .. How long do you think before Google Offers a Permanent Cashback Site Offering. Which will not only affect Cashback sites by offering 100% of the commission return to customers.

In the meantime wouldn't it be prudent for networks to introduce additional clauses in their contracts with the merchant if not already covered to protect both the network & the affiliate.

Otherwise we may experience an avalanche of problems where sales will go untracked for periods of time ranging from days to weeks where often the affiliate is first to identify the problem. btw I don't like the idea we are taking a step backwards to the forms of tracking it is compatible with.

[Matthew Wood]

In the meantime wouldn't it be prudent for networks to introduce additional clauses in their contracts with the merchant if not already covered to protect both the network & the affiliate.

A prudent suggestion Paul.

However if a merchant does play foul, then as always they will be caught with damaging consequences.

[drivetowin]

Paul

I see where you are coming from but is this tracking (once all networks are approved) any more likely to fail to track than any other - personally I doubt it - we all know that a certain percentage of all sales via whatever platform fail to track and I at the moment do not see any reason why Google Checkout should be any better or worse in that respect.

Certainly the feedback I have had from a couple of merchants that I work closely with is that they are very keen to implement Google Checkout (one currently uses Protx and one uses Paypal) so Google Checkout is obviously going to prove a threat to those companies.

I do agree with you wholeheartedly that it is disappointing that Google Checkout does not incorporate other tracking methods, that said I guess only Google know whether Google Checkout in its current form is the end goal or whether there are a number of developments still to come.

Google could offer a cashback solution but I doubt they would want to - the cost base to support it would potentially be very large, and as Matt points out large scale support is not something Google is particularly good at, nor I suspect an area they really want to get into - there are already 100% cashback sites like Quidco but they do not seem to have really dented the fortunes of leading cashback sites like GreasyPalm and rPoints and freefivers.

I can still remember the discussions on here when people were speculating that the launch of Froogle would see the end of many affiliate websites when if anything the plethora of price comparison sites has continued to grow rather than diminish.

Personally I am looking on the launch of Google Checkout with guarded optimism - if it encourages more merchants to venture online, and more people to buy online then ultimately that should be good for the affiliate channel.

[Qui Gon Jinn]

Keith,

Consumers may probably trust the Google Checkout logo (whether they should or shouldn't is another debate altogther)

How do you feel about the checkout logo being applied to affiliate ads for those doing direct to merchant linking without our permission? (It might make Ad stand out more & increase CRT but not necessarily sales. It maybe a case by case basis)

Froogle & Google Checkout could compliment each other quite well, we priority being given to merchants with Google Checkout.

Re Cashback sites : Could Google be looking to acquire an existing cashback site who will have the infrastructure & flexibility to dramatically expand it's consumer base & manage it? Where customer has to have Gmail (or convert to Gmail) and merchant has to have Google Checkout. .. hmmm .. I wonder which cashback sites have shares for sale.

[hpops]

Personally I am looking on the launch of Google Checkout with guarded optimism - if it encourages more merchants to venture online, and more people to buy online then ultimately that should be good for the affiliate channel.

My thoughts in a nutshell.
Coupled with lower transaction costs for merchants and a trusted brand to shop with for consumers I can't see that this won't increase online sales, surely thats a good thing.
Google do things to annoy me daily, they're arrogant, anti-competitive and so full of spin its amazing that they;re not a political party. But you can't deny that they are one of the driving forces behind increased take up of e-commerce, this latest move, however shoddily launched from our point of view crystallises this position and helps us all.

[drivetowin]

Yeah I take your point Paul about the Google checkout logo appearing in affiliate adwords ads - it will all most certainly increase the ctr but whether it increases conversion rate is a different thing - I guess short term it may well due to the Google £10 off baskets over £30 promo but long term I guess it won't and just serve to increase affiliate costs (another thought just occurs to me there, but I'll start a new thread later as I don't want to derail this thread).

Re the cashback thing - yes I guess it's always an option, in which case I guess it could be a good time to buy ipoints shares (since afaik that's the only one that has public shares available) - I can't see Neil, Richard or Matt rushing to sell a share of their sites - but even for the largest of those the potential increase would be huge (but so would the headaches).

Re the Froogle angle you could be write although Google seems to be increasingly reducing the effort it puts into Froogle (merging it into Google Base etc) so in my opinion it wouldn't be a great surprise in the UK at least to see Froogle quietly dropped some time in the next year or two.

[Rich]

I see where you are coming from but is this tracking (once all networks are approved) any more likely to fail to track than any other - personally I doubt it - we all know that a certain percentage of all sales via whatever platform fail to track and I at the moment do not see any reason why Google Checkout should be any better or worse in that respect.

It is limited to a web beacon/tracking pixel - none of the fancy javascript / cookieless / server to server tracking methods the networks are keen to promote (though server to server could possibly be implemented via the checkout notification api). Would the networks spend time on these methods if they didn't think they would track sales a tracking pixel would miss?

If the checkout logo shows next to an affiliate's ads, does that ad spend reduce the merchant's order processing costs? i.e if an affiliate spends £100 does a merchant get up to £30 of free processing (based on sales of £1000
and a £10 basket - £1000*1.5%+100*£0.15)

[buspassjohn]

Re the Froogle angle you could be write although Google seems to be increasingly reducing the effort it puts into Froogle (merging it into Google Base etc) so in my opinion it wouldn't be a great surprise in the UK at least to see Froogle quietly dropped some time in the next year or two.

Well now that Froogle has been quietly dropped or renamed Google search results and soon will have Google Checkout buttons in the results, how long then before Google main search has GC buttons with Google taking their profit from the card processing fee?
Or Google taking a commission on all sales via Google search, never mind 1984's Big Brother, there's more to fear in 2010's Big Google!

[jess1]

Paul: 100% spot on... and busspass, yup you get it :0)

I have so many concerns on this one that I’m not really sure where to begin and the rush from online companies to just hand over their business to a complete stranger is simply staggering and fairly alarming and my immediate concern is do all merchants know what they are getting into? Do they understand the full implications of what it means to have some third party with immense power have your data and your customers? I just feel merchants have sold their soul for what amounts to peanuts in return. What a sweet deal that was and is for google.

Some one said to me "so what? if google sees that data" I guess I would have a problem if a complete stranger that had the power to make or break my business and could see any of my data at all, and google is after all, about data. Admittedly the person that said this to me is working for an agency and it’s not his own business, I wonder if he would feel the same if it were his own livelihood? If a merchant has google analytics, runs google adwords and now google cart, that’s an awful lot of information they now have about your company, and whilst we would like to think a lot of merchants don’t rely on google 100%, that they have not put all their eggs into the google basket, sadly this is not the case for a pretty big chunk of the online space. Coupled with affiliate stats from adsense, networks and paid search, they now have the data to become what ever their hearts and share holders desire.

The google cart logo next to your ad words or on your site maybe a badge of pride today for some merchants, but once google talks to your customers, if they talk to your customers, or if they get upset customers and get it wrong, or mess up a transaction, that badge of pride may become synonymous with avoid like the plague. (so you take google cart off, simple?) Ok but how do you repair the damage, you have lost how many customers? What is the life time value of a customer?

Does it not bother merchants that google interact with your customers? Google owns your customers? This strikes me as giving google control over a % of who, what and when.

Is there a bigger picture? well of course there is, its google!

http://www.webmasterworld.com/forum22/5288-2-30.htm

Should affiliates be concerned? Yeah…. And networks
http://www.revenews.com/jimmydaniels..._up_to_th.html

It’s all done now, so wheels are in motion, no going back!

Paul just a quickie, re networks enforcing merchants to add the aff tracking, it can’t be done with existing merchants as contracts have already been signed?

Maybe networks would look at amending future contracts.

[Qui Gon Jinn]

Paul just a quickie, re networks enforcing merchants to add the aff tracking, it can’t be done with existing merchants as contracts have already been signed?

I am not familiar with merchant / network contracts, but hyperthetically speaking if affiliate contracts or T&C's on ANY program can be changed by network or merchant at short or zero notice ... then ... and this is an open ended question ... shouldn't existing network / merchant contracts be adjusted accordingly (with the same minimal notice) with / and in addition that they (the merchant) shouldn't adopt Google Checkout until all the forms of available / alternative tracking of the various networks is compatible. Even if it is a precautionary requirement, how assertive would "some" networks be compared to how they are with affiliates ... again hyperthetical until I get my head around all of this.

Would this be a necessary preventative measure for this to be instigated to safeguard both networks & affiliates revenue?

From a personal perspective, i will be withholding business from merchants with Google Checkout until I am fully satisfied.

BTW - Coming Soon .... The Google Credit Card ?

[jess1]

Would this be a necessary preventative measure to safeguard both networks & affiliates revenue?

It ought to be, let's put it that way

Ill shoot off some emails to the networks and ask them if they will be adjusting their ts and cs.

From a personal perspective, i will be with holding business from merchants with Google Checkout until I am fully satisfied.

From a personal perspective, I don't blaime you!

My clients will tell you that I have asked them to really look in to this and understand and know what they are getting involved in. I can only advise. The deal that google is offering is too tempting in some cases. Redsave.com see a different picture... I am allowed to quote, so Ill quote the whole thing, hopefully Jon can maybe follow up.

"The obviously savvy new merchant thinks, I will stick some money into PPC (don’t worry though you are bound to make it back within minutes!), they bid on the keywords for their site, every time their new ad shows up the nice Google Checkout logo will show; the ad will stand out, the customer will feel safer and the merchant will make a fortune! (well that’s how Google wants you to think!)

So what does Google end up with, thousands of new merchants springing up over night to use the Google checkout (as the only real payment system they can use!), lots of new wet behind the ears marketers who will think PPC is great and they cant lose, so pump their savings in, (just so everyone can see their new shiny logo standing out!) – higher bid prices and more money as the new merchants overbid and don’t understand how it all really works!


What they don’t think about is,

1) If everyone has Google checkout then over a period of time every advert will show the logo – losing its uniqueness

2) Problems will occur with Google and lack of phone support etc and standard responses to all questions will mean that customers will start to treat Google checkout like Pay pal and the trust factor will be lost

3) Google are only doing this to up sell Ad words and increase bid prices in competitive areas (affecting established merchants)

4) Google are also doing this to gain valuable data on product sales and sales pattern trends – imagine how much that data is worth!

5) If Google want to keep your money for any reason – they will! (leaving you out of pocket)

6) If Google want to keep your money and not pay you – they will! (leaving you out of pocket)

7) If Google want to refund your customers without consulting you as they have had a customer emailing complaining about an aspect of your service or product (like Pay Pal do all the time), they will! (leaving you out of pocket)"

[drivetowin]

I think we have to be careful not to get too paranoid just because this is Google - if a) it was not Google but just another checkout provider or b) the tracking had worked for all networks from day one, would most affiliates have even noticed that Google Checkout had even launched - I'm sure there are merchants with affiliate programmes implementing different payment solutions every day of the week and 99.9% of the time affiliates are totally unaware it is even happening.

To take Jon's points (and it is good to get a merchant's perspective)

1) If everyone has Google checkout then over a period of time every advert will show the logo – losing its uniqueness

True - but that probably explains some of the rush - at the moment (especially with the £10 promotion too) there is something to be said for first mover advantage.

2) Problems will occur with Google and lack of phone support etc and standard responses to all questions will mean that customers will start to treat Google checkout like Pay pal and the trust factor will be lost

True - support is one angle Google have never handled particularly well. But I think that has to be countered with the fact that people who have never shopped before probably will feel safer seeing the Google logo rather than Protx or some other name they have never heard of.

3) Google are only doing this to up sell Ad words and increase bid prices in competitive areas (affecting established merchants)

They are certainly doing it to increase Adwords but I'm not sure why bid prices will necessarily increase - in competitive areas most merchants are probably running adwords campaigns already so I don't see a massive volume of new merchants in competitive areas - just the same merchants but now using Google Checkout

4) Google are also doing this to gain valuable data on product sales and sales pattern trends – imagine how much that data is worth!

Very true - this is almost certainly Google's true motive.

5) If Google want to keep your money for any reason – they will! (leaving you out of pocket)

True, but against that they also guarantee against chargebacks and I'm guessing most savvy merchants (as with Paypal) will empty their Google account into their bank account daily (and if they have any sense have their bank account linked to Google emptied into another account in case of clawback from Google too)

6) If Google want to keep your money and not pay you – they will! (leaving you out of pocket)

Isn't this the same as point 5?

7) If Google want to refund your customers without consulting you as they have had a customer emailing complaining about an aspect of your service or product (like Pay Pal do all the time), they will! (leaving you out of pocket)"

Agreed that this is a real pain.

I know that I am to some degree playing devil's advocate on this one but I think it's important to have a balanced argument.