Kevin Lee would have you believe in his recent ClickZ article that affiliates engaging in search marketing are cheaters or only go after the "low hanging fruit" of search. I'd like to set a few things straight:
1. There are also numerous search firms that only go after the "low hanging fruit" and would not be able to run a profitable search campaign without trademarks.
2. He complains that PPC programs have budget caps while affiliate programs have unlimited budgets. This is typically true as affiliate programs only incur a media cost when a sale takes place - search programs have a media cost regardless of how many sales occur. I have never had one of our search clients run out of "budget" if we were reaching their desired efficiency. Remember that search agencies are typically paid on how much they spend, not per sale.
3. Do some affiliates break the rules? Of course there are always rogue sites out there but if you have the dedicated resources to running an affiliate program and you're aware of how affiliates are promoting your brand you typically run into very few problems. There are many honest affiliates that are making 6 and 7 figures a month and will not risk losing that by breaking the rules.
4. Kevin Lee talks about how more affiliate programs are becoming restrictive and only allow a few "power" affiliates to run search (in his words, "fewer cats to herd"). This is true in many cases, but these "power" sites and the advertiser both benefit from this scenario. By working in partnership and sharing information with a few top sites the advertiser is able to gain greater coverage on more keywords and block competition from valuable keywords. Talk to any affiliate about this strategy and they will agree its best even if they are not one of the sites allowed to perform search.
5. Search affiliates can add significant revenue - as far as I know Mr. Lee has never managed an affiliate program, but those of us that do know that search affiliates can add 10% - 30% or more to an affiliate program
6. Search and affiliate can co-exist. The reason why the search firms battle the affiliate guys is because they rarely are managed from the same cost center. If you have smart affiliates doing search, of course your search campaign may have lower volume, but the COMBINED volume from both channels will be greater. We've demonstrated this across several search and affiliate programs we've managed. The goal of every advertiser should be to get the greatest number of quality orders at the best efficiency regardless of channel.
7. Affiliates have the ability to do some things that no search agency can. Many search affiliates build landing pages and entire sites dedicated to a specific vertical. By building comparison sites they provide value to the users seeking information on the topic. For the advertiser they provide the opportunity to gain traffic from multiple ads on the search engine. For clients in a competitive category this can mean substantial incremental revenue.
Bottom line - don't assume that affiliates can't augment your search strategy. Know who your partners are and communicate with them. Share your learnings with them when you can and treat them as a partner, not a suspect.
Disclaimer - In case you didn't already know it, my firm NETexponent manages both search and affiliate programs for our clients. We believe in an integrated, holistic approach to marketing and that affiliates and search can co-exist in the marketplace.