Google Putting The Screws To Its Affiliates

Having just revamped their Google AdSense referral program to put the screws to its affiliates by reducing (or eliminating) commission payouts, Google is now reducing the payouts for Google Pack and FireFox downloads.

Google Pack: Currently, you can earn up to $2 when a user downloads and runs Google Pack for the first time after being referred through your link or button. Starting the third week of February, each successful Pack referral will earn up to $1. This change will apply to all referrals for Google Pack and is independent of user location or publisher location.

Firefox: We will also be reducing payments for Firefox referrals from China during the third week of February. This specific referral payment change will only affect installations from users in China. As with referrals to AdSense, this is independent of your location as a publisher.

We understand that these changes may decrease revenue for some of you currently participating in these referrals programs. While it is our goal to help publishers earn as much as possible with the AdSense program, like any other referrals advertiser, we are constantly evaluating our campaigns to make them effective and sustainable.

We understand that these changes may decrease revenue for some of you? Doh! Google did add one piece of good news. They’ve decided to allow AdSense referrals from Japan and Latin America. Affiliates in Europe and the UK are still out of luck.

My gut feeling tells me that Google revenues are down and that they’re doing everything possible to post a good quarterly report, even if that means taking it from the affiliates who help them build their business.

I believe Google’s trouble started when they made their ads less clickable. Many AdSense publishers saw their revenue dropped heavily because of the measure. Markus at Plenty of Fish reported that his click rate has declined by 60% in the past two months. If the AdSense publishers aren’t making money, it means the AdSense program isn’t making money. Google AdSense accounts for 40% of Google’s revenue. It’ll be interesting to see how much that goes down by.

I guess what I said about not putting your eggs in Google’s basket is coming true.


73 thoughts on “Google Putting The Screws To Its Affiliates”

  1. Google seems to be getting old nowadays, they are constantly trying to improve customer satisfaction and trying to get the maximum for the advertiser’s buck, but in the midst of this, something obviously went very wrong.

    But…I do not use AdSense because I feel it is over used by too many people in the blogosphere. So it will not affect me, hopefully people don’t get too bugged out, there are literally thousands of other affiliate companies that will pay much more than Google!

    Fabien

    1. your right – google is getting old so many news about the good google and mroe about the bad google and how they did this and that – gosh google!
      I too has left adsense! best move ever

      1. I can only say that if Google does not watch itself carefully it may be heading for a stock market plunge in the next five years.

        1. I guess Google has started to realise that Google is not god. I too dumped adsense and I felt proud of myself for doing that :mrgreen:

          1. Poker Sharks says:

            Google has always been evil – it has made billions out of mistaken/fraudalent clicks on its ads.

            Now it is going clean they are losing money hand over fist.

            Fate it seems, is not without a sense of irony…

    2. I dropped it a few weeks ago, because of all the changes… could be why GOOG is down 21% from its highs.

      Kenneth

      1. Will says:

        wow they are down that much? then again like john said, all these changes to improve user usability is really hampering everyone.

    3. Googles in a jam? Could it be a pepperjam ? :mrgreen:

  2. Remember back in the day when you liked Google? I do! It’s been a while, but I used to get such a warm fuzzy feeling thinking of Google. The benevolent corporation who cared. Yeah right.

    1. dcr says:

      Google used to be focused on its users. Now, its focus is on its shareholders.

      The “do no evil” mantra has long since passed by the wayside.

      1. Will says:

        I couldn’t agree more. I wonder if they will ever fix some of their problems and get back to being the favorite among users.

        1. dcr says:

          It’s possible, but I would have the tendency to doubt it. All too frequently, once a company goes into the “corporate mindset” it is very rare that they ever come back from it, and typically not without a major change in leadership or ownership.

      2. Poker Sharks says:

        Umm no.

        Before Google concentrated on its Affiliates.

        Now it conecentrates on its Users.

        The changes have resulted in a better experience for users, but the Affiliates are being hit hard.

        Out in the real world the Goolge offering is better, but the people that helped Google grow to the empire they are are suffering – time for the backlash!

      3. Alan Johnson says:

        Indeed, and the fact that they seemed willing to let go of publishers such as Darren Rowse just like that only made matters worse.

        Alan Johnson

        1. To be fair, they have reversed their stance on that and are going to let anyone remain an affiliate, but they will only pay you for referrals that are from North America, Latin America, and Japan. It no longer matters where you live, it’s about where your referral is from.

          1. Alan Johnson says:

            It’s actually funny how a company with an army of consultants didn’t know better. This entire issue could have been avoided if they had chosen this approach in the first place, rather than making changes later on.

            Alan Johnson

  3. Gary Jones says:

    Hmmm

    Google loosing money and cutting back to save money. Yahoo laying off 2000 employees.

    Can you say bubble burst?

    1. Indeed it does sound like a bubble burst. Tho Markus reporting 60% decrease on clicks is a huge difference (thats 60 clicks less from 100 he used to get).

      1. Poker Sharks says:

        But i bet the Advertisers that provide those Ads are paying less per click and getting better conversion rates.

        The Advertiser of the Ads LOVE this change.

        The web owner displaying the ads HATE this change.

        Im on both sides of the fence and I have seen my monthly outgoings on adwords go down, but even though i get less clicks the signup rate has been higher.

        As for my adsense earnings – i dont do much but I’ve seen a 30% decline in the last couple of months but luckily I only run adsense to fill a space no one will buy at the moment – im looking to swap it out as soon as i get a buyer.

        1. Alan Johnson says:

          Exactly, a lot of the changes which are not exactly popular with publishers are great news for advertisers, every company needs to find the right balance between keeping both advertisers and publishers happy and the folks over at G have not exactly done a great job lately.

          Alan Johnson

  4. Neil Duckett says:

    The location selection surprises me, i live in Japan and have no idea why we are able to keep getting paid for referrals, maybe it’s because Yahoo is more popular here and Google are just trying to increase there presence.

  5. I find that incredible that Plenty of Fish has seen a 60% decrease in CTR when I haven’t seen any decrease at all. Granted POF makes way more than I do, but I continue to earn about the same with the same amount of traffic.

    1. Poker Sharks says:

      Its the big earners that are suffering most because a lot of their clicks were generated by affectivly ‘tricking’ the user to click an ad when they didnt mean too. POF does that on just about every page. Now he is only getting puposful clicks revenues have gone down.

      Im guessing you display your ads in banner or sidebar postions meaning your clicks were 99% puposeful to begin with. Hence you revenues have stayed constant.

      POF is suffering – but he played a dangerous game with the google ads everywhere knowing full well he was getting mistaken clicks. He should have signed numerous advertising deals by now with legit companies and guarranteed his income a long time ago and not be lazy and rely on adsense. Times have changed and he hasn’t, time to pay the price.

      1. On my best site my ads are in the content, but I’m not trying to trick anyone. POF was making a reported $10,000 per day so he should have a few months worth of revenue to live off of, wouldn’t you think?

  6. Leroy Brown says:

    I’ve seen huge CTR drops across all my sites since they made their change… the sad referral program just makes it even worse. I’m convinced that Google hates everyone and is just trying to see how far they can push.

    1. Alan Johnson says:

      It’s indeed incredible how a company with an army of consultants can make that many bad decisions, it just goes to show you that a huge budget isn’t everything 🙂

      Alan Johnson

  7. SeanS says:

    …disappointing..!
    I own Korean blog but I live in America..
    and I cant refer adsense anymore..

    It is getting harder to make money from blogging.(esp in Korean)
    man..should I start english one? 😡

  8. Shaun Carter says:

    That’s a very astute observation about the clickable area affecting Google earnings down the road. Google may move to take a larger percentage of click revenue and share less with publishers in order to prop up their quarterly earnings.

    None of these changes are good for publishers though and they are the reason Google makes as much money as it does.

    1. Shaun, it’s a slippery slope for Google, the more they take, the less people will use Adsense. Hence revenue still drops. The reality is: Google’s goodwill is gone, spent, used up; and from now on, it’s jus another company with a sagging stock price.

      Kenneth

      1. Alan Johnson says:

        Exactly, if they go too far with such changes, publishers will simply move on and, as such, G will end up making considerably less as a result of their approach.

        Alan Johnson

    2. Poker Sharks says:

      Thing is – if click rates go down Google will be losig a lot of money.

      What is to stop them moving a 50% cut up to 75% to save their own skin?

      Well theres nothing to stop them doing that as they dont even publish what their cut is in the first place! Google will need to become more transparent if they want to gain some trust back from publishers.

      Maybe they’re hiding in the shadows because the percentage is even higher than most people think and they know it would cause an outrage?

  9. lee says:

    Poor Markus. According to a recent NY Times article, he pulled in $11 M advertising last year. At this rate, he’ll only make $6 M. Let’s all pass around the hat and help him out, will ya?

  10. Tech says:

    I think Google are getting a little greedy. It will be their downfall.

    1. Alan Johnson says:

      A lot of people predict the downfall of G on a regular basis but it seems that, no matter how controversial their decisions may be, they somehow manage to stay on top.

      Alan Johnson

  11. Will says:

    I’m kinda glad this is happening. More doors are opening for other ad companies to step up and provide a more profitable service.

    1. dcr says:

      Of course, that’s been said for quite a long time. I’ve had Adsense for I don’t remember how long now, and everytime Google has made a change, people (including myself on a few occasions) have spoken up and suggested it was a good time for other companies to step in and offer something better.

      Yet, others still aren’t getting much traction in that regard.

      One reason too may be that there aren’t really many destination sites anymore. It used to be that you’d go to one site (maybe Yahoo, maybe Google, maybe others) for just about everything.

      But now you go to one site for search, another for news, another for this, another for that. I might search for something on Google, check news on Yahoo, skim for things of interest in digg, and then look up something in Wikipedia. There was a time, not too long ago, where I would do all that in Google.

      There will be more opportunities, which is good, but the fractured system may result in less profitability as spending increases to try to grab viewers.

    2. As long as google doesn’t kick in the ass of the users of other profitable ad services…
      BTW we should find a Google PR alternative to make the game tight for Google.

      1. Alan Johnson says:

        Izea have launched something like that but at this point, it’s hard to imagine that it can compete with PR, but as far as the future is concerned, who knows what competitors may have up their sleeve 🙂

        Alan Johnson

  12. bennyong says:

    Lately, my Google income has increased. It will be interesting to see how I will be impacted by the change. :mrgreen:

    1. Poker Sharks says:

      From $1 to $3 😛 ???

      Nah, adsense isn’t dead and you can still make cash from it. But any publisher that starts to grow needs to swap it out quick as the adsense wont grow in proportion with traffic.

      Just as John has done, swap adsense out and get monthly advertisers paying set prizes instead of being at the hands of google where incomes rely on your users actions and how much of a cut Google decide to take that day!

      (I can just see them in their office now: Hmmm, profits are down 3% for the day, lets take 53% of ad revenue instead on 50% to make up for it – they’ll never know!)

  13. Markcy says:

    Adsense is very useful manner for promotion, I understood more detail now. :mrgreen:

    1. Your talking about Adwords…Adsense is for publishers to display the ads 😛

  14. I have wasted a lot of time chasing Adsense for peanuts on my blogs – could living in Europe be the reason? After reading this, I am going to use the space for more potential income generators.

    Enjoyed the article and the responses, thanks
    AnneMarie

    1. Kym Huynh says:

      I don’t think so. You could be receiving a lot of your traffic from America anyway so I think it’s rather optimisation and drawing traffic to your website.

    2. David Chew says:

      I am not sure if google affiliate is that good but many people seems to be not making much money from it.

  15. Steve says:

    This just states that Google is not immune to recession. Google is a great company with great ideas but overall, it can’t beat the economic downturn. Especially, now with subprime loans, bonds, ..etc

    * Bank of America just reported a 95% collapse in profits.
    * Wachovia reported a 98% plunge.
    * Yahoo is laying people off

    Anyways, I read from NYT that there is still a need for high price items, like $1Million corvette and very very expensive stuffs. So the elite”rich” are still shopping and spending, expect the middle class is strapped!

    John, you need to create a website for the A list people. How to spend a million dollar!

  16. Seopher says:

    It’s an odd decision by Google when webmasters account for so much of their income. Adsense has been so poor lately I’ve been contemplating dropping it for some time; hitting the affiliates doesn’t seem smart either.

    I wonder if this will have any impact in the uptake of Firefox…

  17. Speaking of getting jerked by Google was I the only AdSense publisher that didn’t receive a cool Google gift this year? Usually Google sends publishers something nice. But I got a cheesy card.

    It’s little changes like this that are reflecting the air of Google. I’ve been switched up my income strategy and focused more on lead generation offers when I saw my sites were being smart priced early in the year.

    They just seem to care less about the folks that helped them get big which is us the publishers.

    Honestly any time a company goes public, it becomes bad for the users and customers. It becomes all about making those numbers for the given quarter. Whereas when you’re private you don’t have shareholders to answer to. You have your customers to worry about.

    I predict at this rate Google will have a nasty ring to it like Microsoft.

    Google’s saving grace right now is that they still pretty much offer a lot of great free and useful services but the tide is definitely turning.

    Considering the discontent of publishers, this is a perfect opportunity for yahoo or msn to sway publishers to their networks.
    But they need a lot of work before that can happen.

    Eddy Salomon

  18. Kabatology says:

    It’s rather unfortunate that not all can do away with Google. A small blog does better with PPC than affiliate marketing – there a very few worth-trying PPC programs outhere, so we stick to google…. for now.

  19. Poker Sharks says:

    The problem with the Google empire is that i is built on a foundation of either fraudalent clicks or mistaken clicks.

    Web owners around the globe placeed their Google Ads in postions that users would mistakenly click on resulting in lots of moola for the owner and Google.

    That is not the foundation you want for a company with a value of $xxxx billion.

    I’m glad Google have changed their ads as this is how they should have been from day 1. Playing by the rules doesnt pay though i guess as profits are down and Google is starting to see just how much of their Adsense revenue were mistaken clicks.

    Google have their fingers in so many other pies but a 40% chunk of your business disolving by 50% is still a 20% drop in profits and would hurt any company. Looks like its the affiliates that are getting punished and Google are hoping people are too lazy to remove their ads despite the lower commissions. Problem is this will only further hurt them further down the line with less sign ups.

    Sounds like they’re getting desperate…

  20. The Mad Ape says:

    Relying on Google for 100% revenue is a trap too many people fall in to. Diversification is the key John. You said it yourself: ‘any more that 30% or your monthly return from one source is too much.’

    I think 30% may be too high but that is another debate for another day.

    Google has taken a hit on a couple of fronts:

    1) YouTube has more traffic than Google – guess they were smart buying that site after all!
    2) MySpace and Facebook are closing in fast. Google’s business model is old school and is fast becoming a dinosaur.
    3) THE BIGGEST REASON GOOGLE IS DESTINED FOR FAILURE…you heard me right…failure is that people can hack a web page right out of their search results. Didn’t know that huh?

    There is a bug in Google’s algorithm that allowed 3rd parties to literally hack a web page out of Google’s index and search results.

    A guy by the name of Dan Thies discovered this bug a long time ago. At first he did not go public with it, but when Google, in their arrogance, chose to ignore his private warnings, he did go public.

    Others have too. He shows you how to detect if your site has been hijacked, how to fix it if it has, and how to stay on top of it.

    How serious is this? Very. His discovery was in June 2006 and Google has not resolved it yet. Why is this important? Because you can have your page bitch-slapped by a proxy and end up with the bottom dropping out of your ranking overnight, while the proxy gets all of your traffic. Their page will show where yours used to.

    Nice huh? So to recap the big and mighty Google:

    Declining revenues for website owners, Google putting the screws to us because they need a bigger slice of pie, Google’s search algorithm, their bread and butter, is flawed.

    So that means one of two things, either they don’t care, or they are incompetent, of which both are scary from a shareholders perspective.

    Read his blog post at http://www.seofaststart.com/blog/google-proxy-hacking

    And before I get accused of some secret deal with this guy to promote him, I don’t. In fact he doesn’t even like me and has insinuated as such on my blog.

    The Mad Ape

    1. Poker Sharks says:

      I think you may have slightly over hyped all that.

      Google is struggling due to a drop in adsense clicks, not bad search results.

  21. John, Google actually revised their previous changes and said that affiliates located in other parts of the world will still be paid for referring people to AdSense, however, they will only be paid for people that sign up from the safe areas (North America, Latin America, and Japan). While that’s certainly not ideal, it’s better than nothing.

    1. Alan Johnson says:

      It’s at least good to see that they are responding to the overwhelming negative feedback they’ve received as a result of their decision, but they should have seen something like this coming before making the announcement.

      Alan Johnson

  22. Is Google doing anything that actually makes people happy these days? How many posts do you read where people are beside themselves with joy for what Google has done for them?

    1. Well Darren Rowse did write that love letter after they reversed their decision to base the referral ban on the location of the referrer. But really, even that wouldn’t be considered real happy.

  23. Actually its a smart move…would you rather complain about them lowering rates slightly? or complain that they’ve just offloaded 40% of their workforce….

  24. marhgil says:

    I don’t think Google reducing the clickable area on ads is a bad move from them. It’s actually a good move IMO.

  25. I don’t think it is either. When advertisers benefit, then publishers benefit, in the long run, as well.

    1. See that’s Google’s argument as well but I would disagree with that completely. It’s more like when advertisers benefit, Google benefits and the publishers get screwed.

  26. I think the year 2008 will be the year of transition. It might very well be away from Google on some sites, but on others it would be a shame. The reason why some people’s earnings are way down is the ABUSE of some of the system.
    I am very principled in that area. When I see breaches of terms of service I report them to Google. These guys ARE the ones destroying our business.

    But indeed, there are sites where Google just doesn’t match. Better stick to what TRULY works. 🙂

    1. Alan Johnson says:

      Sure, a lot of people say that it will be the end of G, it happens after each controversial decision of theirs but, in the end, I doubt that we will see another market leader anytime soon.

      Alan Johnson

  27. Caleb says:

    This only adds more support to the new ‘Pay Per Play’ platform which pays commissions based on users hearing a 5second ad once. You can find out more at this post: Get Paid on 100% of Your Website Traffic, No Clicks Necessary! How is this possible?

    SEOBlog even made a rediculous post against this.

  28. Caleb says:

    I’ve never been a big fan of adsense anyway…it just didn’t seem to be worth all the constant tweeking. Recently,a few products were released which build adsense sites for you…I wonder if those who are purchasing this understand what’s going on with adsense?

  29. Justin Rumpf says:

    Is there anyone left that doesnt have to use google to make a buck? Google Schmoogle. My new thing is I dont use Google, Bad Business Decision or Revolutionary? Time will tell.

    My feel is that although google won’t admit it, they dont like people like affiliate marketers, or any sort of middle man. The adwords were not built for people like us but they saw how much money it could put in their pockets and they went with it. Now the game is changing and slowly but surely, it is becoming harder and harder to be an affiliate marketer on google.

    If anyone wants to discuss the demise of google any further they can leave a comment on my blog…

  30. Yes google stopping the referral commission for their adsense program except Japan and Latin america. Really it is loss for publishers. But as we aware referral commission is only a small part in adsense income other than search and adcliks. A monoploy site can take any steps. Let us see how can we survive without the referral commission. The referral commission is only 0.5% of my adsense income.

  31. Really it is a great loss. But what can we do when such a monopoly sites do so.

  32. Haroon says:

    it will surely affect googles earning as well
    just wait for the quarter report

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