Amazon Affiliate Program Changes Affect Arbitragers

Bad news for search affiliates (arbitragers) out of Amazon today.

Here’s what was posted to their Associates Alerts.

After careful review of how we are investing our advertising resources, 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, and their extended search networks. If you’re not sure if this change affects you, please visit this page for FAQs.

As of May 1, 2009, Associates will not be paid referral fees for paid search traffic. Also, in connection with this change, as of May 1, 2009, Amazon will no longer make data feeds available to Associates for the purpose of sending users to the Amazon websites in the US or Canada via paid search.

This change applies only to the Associates programs in North America. If you are conducting paid search activities in connection with one of Amazon’s Associates Programs outside of the US and Canada, please refer to the applicable country’s Associates Program Operating Agreement for relevant terms and conditions.

So the PPC affiliates get slapped again.

Although I sincerely hope that no one reading this is singularly dependent on Amazon product sales through PPC, if you stand to lose even a small percentage of your affiliate earnings due to this new policy, this is definitely the time to change your strategy – or at least add to your current arsenal of marketing methods.

One thing you might consider is running those Amazon feeds on a niche focused blog with a product like Datafeedr. Get some (core) content to add value. Build a list and connect with your readers regularly.

In other words, build a business blog that doesn’t run the risk of getting slapped by the likes of Amazon or Google.

Comments

  1. says

    Very good advice! I agree that it isn’t wise to base all of your income on one strategy since search engines can change the rules on you instantly. Keep up the good work!

  2. says

    Ross:

    I’m like to promote Casino offers, but last year I read about the US laws regarding casinos that make me feel somewhat scary about it. Can you make some recommendation about it.

  3. says

    Hi Ros,

    I was furious when I found that in my inbox yesterday morning! I immediately wrote them and told then to close my Amazon account, and told them with those menial commission %ages, and now this, “just close it!”

    They wrote me back and “clarified” their new PPC rule, and told me that “as long as you link through your own website, that’s OK”. So as I see it, if you put a simple re-direct though your site, voila!

    But now (again) reading their notice, they sure do a poor job of spelling things out. Maybe you can check it out too, Rosalind!

    Take Care!

    John

  4. says

    WOW…thank God I never used PPC with Amazon. I learned a long time ago PPC was and still is very iffy. I wonder if other affiliate programs will follow soon?

    Paul

  5. Mike E says

    Greeings,

    I sense a sea change here…it’s one thing when a small retailer decides not to allow direct linking from PPC ads, but when a heavyweight like Amazon does this?

    Personally I would not want to build an internet business on top of a one – legged stool such as pure PPC arbitrage (with no landing pages, nothing of substance). Your approach, detailed in your Affiliate Handbook is a better, more diversified and more stable strategy to build a business. Which is really what will hold up robustly through thick and thin: a carefully designed and executed business plan building on a foundation of quality content.

    Recently I watched with fascination as a new PPC “spy” software was released with huge fanfare. The comments I read, dozens of them, were an eerie glimpse at a frenzy that looks starkly similar to the promotion of stock market / futures trading courses and software by guru types to mostly naive refugees from reality.

    A comparison between day trading vs. investing and and pure PPC arbitrage vs. quality content development is a worthwhile one to at least ponder, if you are looking to build a sustainable business from the internet.

    I don’t trade myself, but I once did a graphic design project for a day-trading guru. His devotees were (like himself) as fickle as a school of minnows, and about as vulnerable. 95% plus of his subscribers blew through their entire trading accounts an a matter of weeks to months. It was sickening and sad, so many well – intentioned honest people injured financially and emotionally.

    They’d have fared far better building a real business providing real value.

    Pure PPC arbitrage has many characteristics similar to day trading: it’s fast, furious and fickle. And increasing reliance on (the hope, at least) of software to automate the process stands out as a common element here.

    Really what these “spy” software programs are all about is market and competitive research. Which is fine, as far as it goes, and I’m sure the developers have built very capable programs. But it’s only one component of a bigger picture. One has to contribute some value at some point, if one’s to build a real business.

    If your business is built upon providing little real value to the world around you, then your livelihood is likely taking on the form of a day trader’s.

    And as Ros pointed out in a recent article called “choose your business model carefully” you could find yourself in for a very different experience than you signed up for. If you’re “successful” that is… if not, your PPC arbitrage account could vaporize as quickly as the aforementioned day trader’s.

    Back to Amazon’s policy change, it may mark a turning point in the fortunes of PPC affiliates as other companies follow suit. I hope PPC affiliates will give some serious thought to the idea that they may have some real value to give the world around them, who will reward them for it.

    Ros’s approach is a worthwhile way to build a robust, stable and successful business on the internet.

  6. says

    I received another response from Amazon this morning. They basically said this:

    “I’m very sorry that the e-mail wasn’t clear. Thanks for letting us know that we need to clarify what the new policy is.

    If you need to contact us back, you can do so by . . . . ”

    So we’ll be getting the truth soon!

    John

  7. says

    To be fair, the “arbitrage” and PPC courses I’ve checked out (and taken) have only recommended direct linking to affiliate offers while testing them out trying to find a good one. (Too bad so many aren’t.) They usually recommend that a website be built around the converting product niche and ultimately additional offers would be added in that niche.

    As Mike E says tho, there is another PPC “spy” product that sounds like it will literally “steal” the campaigns away from anyone. If that ability gets around, it certainly seems stupid to continue with PPC advertising for cheap payouts. In fact, I can’t imagine anyone seriously continuing the arbitrage model, given this new spying ability. I wish I hadn’t spent money on the course or tools.

  8. says

    What’s Amazon’s perspective? Presumably their decision is based on their bottom line. Recently a couple of web hosting suppliers dropped affiliates too. But then, presumably fear of investment (in affiliates) in this bearish market may drive such decisions too. Any insights to help us forecast other danger zones?

    Peter

  9. says

    I have to say Im really not surprised by this news. It seems that everyone is cracking down on search arbitrage methods. The more I learn about affiliate marketing the more I see why the content oriented methods are the most effective and lasting online marketing strategies.

    Honestly I don’t see how you could make any real money doing this anyway with Amazon’s tiny commissions. PPC is expensive, and it would seem like a sure way to lose money to link directly to the site. You would have to have some pretty desperate buyers anyway! :-)

    Ros, I’m no expert on affiliate marketing, but I have to say that the strategies you teach in the Super Affiliate Handbook have been mostly what has worked for me. People want to read about stuff, and the text links in my content have been the most effective money makers on any of my sites! I think the people who stay in business in the long run are going to be the ones with the content sites for sure.

    Thanks for this cool blog post!

  10. Debra says

    I also received this e-mail and was relieved that by using the shopping genie to drive traffic and get affiliate commissions I would not be affected by this. I also heard the new Internet Explorer 8 will not collect Cookies and could adversely affect many affiliate programs. If you run into this problem the shopping genie does not rely on cookies and actually pre-empts search.

    Debbie

  11. says

    Thanks for that info. Read the other comments and it seems Amazon is not
    exactly tackling these issue very well. This will anger many and they
    might end up loosing some account. i think they could send clearer notices
    so not to create confusions.

  12. says

    You can’t plan your entire marketing business around one market. There are so many other ways you have to integrate in to stay successful.

  13. says

    Yeah, I was making some money from Amazon arbitrage; good thing it was more of a sideline than my whole deal. I feel really sorry for anyone who was dependent on this, but I guess it’s the whole thing about eggs and baskets, huh.

  14. says

    Amazon has done exactly what ebay has done. They have both collected all the data from the hard work of their affiliates. They know exactly which search engines convert, which keywords generally lead to sales, and have all the approximate cost figured out to where they can just do it themselves and make more money in the process. While I don’t blame them, they should have given their affiliates a longer notice to comply.

    • says

      I agree with you. This makes sense and affiliate really build your business. They have a lot of information that they can build on that was provided by their affiliates. Good point!

  15. says

    Well – couldn’t you just go from PPC > Own site > Redirect > Amazon?

    Why would they make such a move by the way? I would love to have other people pay for my PPC!

  16. says

    Thanks for the this news. I was planning recently to venture my online business on this strategy. I’ll have to detour then.

  17. Daniel says

    Poor those who use Amazon for their PPC business. But it will make them smarter after that.

  18. says

    I tried promoting amazon products in this manner but was never able to succeed… never had any luck with PPC actually..

  19. says

    I’m sure you can go around this through redirects and stuff, whenever google or anyone changes their policies, this just brings about ways to go around them.

  20. says

    I would not have minded this one bit except… after receiving this email, I received a second email telling me that I had been identified as one of the accounts using advertising for this purpose. You can imagine my surprise since I have NEVER used advertising for any of my sites EVER. I immediately wrote back to them and was given a rather disappointing email reading, “if you’re not advertising, you have nothing to worry about” email. I have kept an eye on my amazon earnings and since they have continued to rise, I guess I was not penalized afterall. I agree with many of the above comments; those ultra low commissions and restrictions that keep us from making a good earning from our Amazon referrals are definitely worth reconsidering. When averaging $15k a month from programs like AdSense, it makes little sense to humor Amazon when only a few hundred of that income is from them. Time to give Ebay partner network the spotlight perhaps?

  21. Paul says

    Its reasons like this that make it important to diversify your online business, otherwise its not really a business, its just making a quick buck. However, i`m sure some people still do direct link to amazon using blackhat type methods

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