Google’s AI Overviews are reducing traffic to review content and buyers’ guides by up to 50%, according to an affiliate marketing specialist.
Paul Cunliffe, who works with publishers on their affiliate channels, described the arrival of AI Overviews as a “real challenge at the moment in the affiliate space”.
Publishers can earn affiliate revenue by linking to products and services, taking a commission when readers make a purchase by clicking through a link.
Cunliffe was speaking at Press Gazette’s Future of Media Trends event in London on Thursday on a panel about licensing, affiliates and retail revenue streams.
Cunliffe, former managing director at Shortlist and director of affiliates at Time Inc UK, said Google’s AI Overviews, which began to summarise content from across the internet at the top of search results last year, have “reduced traffic considerably to buyer’s guides and review content”.
He said this is having an effect of “as much as maybe 50% in some cases”.
[Read more: AI Overviews cutting publisher clickthrough rates by 50%, new report finds]
“So this is a range of content that was highly optimised for search over years and years, suddenly hit by a huge drop in traffic, a corresponding drop in affiliate revenue from 20-40% in some cases, which is really a massive hit…
“With that what you get is a drop in commission rates as well, because you’re not referring as much traffic to those retailers, not as many purchases are being made.”
Publishers told to ‘optimise the heck out of what you have’
Cunliffe said this is why he felt the “fightback” against Google’s AI products is important, citing a legal challenge submitted to the UK’s Competition and Markets Authority by groups including the Independent Publishers Alliance in July.
The CMA has just designated Google as a tech platform with “strategic market status” in relation to its search products, including AI Overviews and separate generative search feature AI Mode, which will allow the regulator to implement new rules and regulations.
[Read more: How to grow publishing revenue in a world of declining traffic]
“In terms of your content, the thing I’d be looking to do is optimise the heck out of what you have massively so make it work a lot harder.”
Cunliffe said across the industry average clickthrough rates are about 4% but that at New York Times testing and reviews brand Wirecutter that is more like 40% “so there’s still a lot of ground to be made up”.
He said this can be done by “going deeper rather than broader into content – so go deeper into categories, rather than covering more, becoming more niche.
Cunliffe advised publishers to look at “the hierarchy of information on your pages as well. We’re often still stuck in kind of the magazine way of doing things with reviews.”
Personalisation could be the “next step on the rung of the ladder” in the affiliate space, Cunliffe said.
He said two people would “be recommended the same pair of headphones, but we have different needs, and personalisation is something that isn’t in this space.
“No one’s yet really worked out how we can start to reflect that…”
Why New York Times Wirecutter is leading player in affiliate revenue
Cunliffe also explained why Wirecutter is doing so well, citing its “singular focus in terms of what it’s doing” including the fact it is “incredibly ad-lite”.
He said its clickthrough rate is at 40% “because the trust signals are extremely high, the content is extremely thorough.
“The average length of an article Wirecutter is around 4,500 words. So, when they’re testing something, they’re really testing it, and you’ll see loads of trust signals right from the top of the article going all the way down.
“There’s no reason why, if you’re in the US and you are looking to buy headphones, you wouldn’t go to Wirecutter. They are the best place to go to get that information. There isn’t really a UK alternative to Wirecutter.”
He said UK websites like Techradar and Trusted Reviews feature “plenty of ads” meaning they are split between “lots of different ways of making revenue”.
“Wirecutter is about one way of making revenue and that’s why it works.”
Michelle Myers, global chief revenue officer at global content licencing agency Wrights Media, agreed that Wirecutter is “killing it from an affiliate perspective”.
She said: “I think the reason why, one of the reasons why, is they have a very strong methodology. And the buyers who are buying the licensing, they want a strong methodology. It’s very important to them, because there’s so many players in the category.”
US publishers ‘further along’ on affiliate revenue than UK
Myers noted that overall US publishers are “further along” in its investment in affiliate revenue and e-commerce than in the UK.
She said these streams of income “are great source of revenue” for US publishers, “which I don’t see happening” in the UK.
Myers said: “I can see it, because we have clients on both sides: the US is further along, I would say, with e-commerce and affiliate – the publishers have invested in internal teams and have grown those internal teams significantly. It is a great source of revenue for these publishers.
“The US culture has really moved from a shopping perspective when Covid hit to looking for those editorial endorsements of products and selection for reviews.
“So, it has really changed the landscape of shopping in the US, and those publishers are making a significant revenue from that.”
She added a lot of publishers in the US have created their own commerce content brands, CNN Underscored and Forbes Vetted, “off of what I call the mothership”.
In the UK the likes of Indy Best, whose reviews led to one million purchases last year, and The Guardian’s The Filter, which launched a year ago, were mentioned at the event.
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