Netflix, Ocado and Toys R Us affiliate accounts are understood to be up for grabs as a result of the closure of Google Affiliate Network (GAN) announced yesterday.
The internet giant had exclusive US and UK contracts for Netflix and Ocado in the UK, both of which will now need to seek new affiliates to work with as a result of the closure.
Brands and agencies have expressed shock at the news, although all agree the effects will have a more significant knock-on effect in the US where GAN is understood to be the third biggest affiliate network behind Linkshare and Commission Junction.
GAN had far less traction in the UK, largely due to the fiercely competitive market, but many believe it had great potential to evolve and grow further had it not closed.
James Little, partnerships director at topcashback.co.uk, which worked with GAN in the US and UK, said the news of the closure came as a “huge” surprise.
“If it had just been closing its UK operation it would have been less surprising as it has been here for a year or so and had a few programmes that have done well but overall not been a huge success as it takes quite a while to create a network here because the market is so competitive.
“However, If it had stayed for another couple of years I believe it would have grown to be a major force in the UK and probably Europe. In the US it is pretty huge – the third biggest network. If you think of the scale of the US operation compared to the UK – that’s a lot of money, but granted probably a speck in the ocean compared to the revenue created by other products like AdWords,” he said.
Little also believes the brands that will have to switch accounts as a result of the closure, including Netflix, Ocado and Toys R us, along with a few other smaller merchants, will not receive such low rates with other networks. “The difficulty that some of these merchants will face is that Google in the UK was offering exceptionally low override. I don’t think they will get the same deal anywhere else so their costs are likely to increase and it will be interesting to see who foots the bill for this; the merchant or the affiliate – meaning lower commission – which ultimately could mean the customer when you take cashback into account,” he said.
Some believe part of the reason for the closure could be a result of the backlash Google faced over its row with Apple last year in which Google was accused of using cookies to trick the Safari browser so it could monitor users on Apple’s iPhone, iPad and Mac computers, which Apple later blocked.
The subsequent lawsuit ended with Google having to pay a $22.5m fine to the Federal Trade Commission on charges that it circumvented privacy protections to track Safari browser users.
“I believe this probably was part of why GAN was closed. They did end up coming to an agreement and sorted it out but it took a long time and angered the affiliate market. It probably lost a lot of publishers and merchants as a result of this,” said Little.
iCrossing paid search director Sam Fenton-Elstone said: “Google should never have allowed its technology to override Safari no-track settings as this would have reduced trust with all consumers. What is clear though is affiliates' motivation; the commissions they can earn. Without this, the model is broken. Acknowledging that a "proportion of their commissions might not be tracked" just isn't a solution.”
Most agree the impact will be felt far more in the US than in the UK. Helen Southgate, online marketing controller for strategy and planning at BSkyB, said: “In terms of the UK affiliate market I don't see that there will be much impact as GAN had not yet gained much traction in the UK. In the UK there are many well established and successful affiliate networks so breaking through in the UK was always going to be a hard task.
"I'm surprised it didn't give it longer but this looks to be a closure across all markets, not just the UK, so the decision must have been much wider than the UK business. The affiliate market in the UK is continuing to thrive and I don't see this changing based on GAN's closure in the UK.”
Head of media innovation at LBi Andrew Girdwood believes there are several implications surrounding the closure. “It may mean Google can crack even further down on ‘poor quality affiliates’ and there's even implications for Android – Apple has an affiliate program for iTunes. We all thought GAN would finally launch one for Google Play. That's clearly not going to happen now,” he said.
Head of affiliate marketing at iProspect James Baigent said the news of the closure was “disappointing” and agreed there was great potential to integrate with other Google products.
“As a technology solution it was a really smart product and had the potential to integrate with other Google products, for example the Google blogger network which featured as an application within it. So if you had a large affiliate programmeand wanted to reach a lot of people in, say, travel, then it was a great resource to have to improve reach. It was a really interesting platform so it’s a real shame to see it close,” he said.
Google has issued guidance on how to close a GAN publisher account here.