Blog

SEW coverage here. This is AOL US - not UK, which was sold to CarphoneWarehouse in 2006 (although elements of ad sales and technology are managed in the UK by AOL US I believe).

This would create a super-strong ad sales house with direct ownership of hundreds of millions of impressions, email accounts, IM users and profiles as well as deals to re-sell the ad space of other websites.

I'm not going to go back over the issues here, but just state my belief on the the approach the industry should take from here: 

• explain to consumers what is being tested - and tell them if they are affected;
• educate them on the advantages this type of targeting has for them and site publishers
• tell them exactly how their identities are protected, and
• allow them to opt-out.

However, I do believe behavioural targeting is acceptable and useful - after all, it has been around longer than the current hoo-ha in the press. The Economist has a sensible piece on it this week - "Not necessarily a bad idea."

AOL first entered the affiliate arena by buying Advertising.com back in 2004. Advertising.com offers an advertising network (including affiliate CPA activity) to agencies and advertisers.

Now they have acquired privately-held buy.at to strengthen Advertising.com - and in my opinion they also wanted to take an emerging player out of the affiliate game before it became too expensive.

During some office banter, a colleague and I joked about who would buy the remaining independent affiliate networks - and I joked Microsoft would.

Hang on...is that such a surprising idea?

Putting aside the fact MS is going to be tied up in a corporate chess game with Google over the next few months, isn't affiliate marketing an area Microsoft (or rather its MSN/Live division) lacks?

MSN/Live today includes:

• Natural Search (no revenue, but vital to attract a user base)
• Paid Search (PPC revenue)
• Shopping Search (PPC revenue)
• Maps and Local Results (ad revenue, although not a mature product or revenue stream yet)
• Live Messenger (display advertising revenue)
• Hotmail (display revenue)
• MSN and other properties (display and partnership revenues)

But...no affiliate network.

AOL now has one (two if you place the CPA element of Advertising.com in this category) - and Google and Yahoo have none.

That's a missing revenue stream and one less chance to access hundreds of advertisers on one hand and thousands of website owners on the other.

Affiliates are a major part of the online landscape and a client acquisition strategy we recommend to many of our clients - so why would Microsoft not want to capture part of this lucrative market?

Or Google for that matter - affiliate scheme members aren't that far away from AdSense publishers...cross sell, anyone?

This is a good sign of maturity in the relationship between media owners, agencies and advertisers: under delivery has always been a source of dispute between some owners and agencies. Hopefully clients will benefit and receive more of the inventory agencies have booked upon their behalf, and agency staff will have to spend less time disputing under delivery.

Sadly an agreement on compensation for under delivery was not reached; however the long term objective is to lower under delivery thresholds to 2% by 2010.

Brand Republic article (free subscription required). Hat tip to KH for this link.