Friday, November 22, 2024

Forbes, CNN, and Others Lose Millions As New Google Policy Tanks Affiliate Businesses

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“To target at a directory level—that would require some very specific algorithms or a human touch,” Paine said. “I would say this is almost unprecedented.”

Google’s crackdown

Paine and other search engine analysts suspect that the targeted declines are related to a new Google policy, enacted in May, called Site Reputation Abuse.

The policy aims to crack down on affiliate businesses run by third-party companies, according to multiple search consultants. Google previously allowed this practice, they said.

A Google spokesperson told ADWEEK: “We’re working to combat tactics where third parties try to exploit a site’s reputation just to rank well in search. We recently updated our spam policies to specifically target this type of behavior.” 

The spokesperson added: “We’re also improving our systems so they better understand if a section of a site is starkly different from the main content of the site.”

Implications of the declines

The declines could have dramatic implications for publishers, according to Ray.

Forbes, in particular, is in the midst of an effort to sell itself to the private equity arm of Koch Inc. for around $570 million, according to Axios. A substantial loss in the value of its affiliate business could impact those discussions. 

Time, too, has recently been floated for sale at a price of $150 million by its billionaire owners Marc and Lynne Benioff, according to CNBC. And for the other publishers, the declines represent material losses in revenue and traffic. 

But perhaps more critically, the crackdowns signal that the underlying model that animated these affiliate operations—working with a third party to run the business, then splitting the proceeds—might no longer be viable, according to Ray and Lofgren.

This shift could mark an end to the era of publishers outsourcing their affiliate efforts, according to Ray. 

Going forward, if a publisher wants the commercial benefits of an affiliate business, it will have to in-house those efforts, which would require a more substantial investment of capital and resources.

“This was a gold rush that worked well for a few years,” Ray said. “Now Google is cracking down.”

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