The release of a referral program for AdSense is a pretty innocuous event on the face of it. But delve a little deeper and you start to understand why Google are dipping their toes into affiliate marketing.
Take a look at Google AdSense revenue growth over the last three quarters and you see incremental decreases of 19%, 8% and 7%. Why? Well one possibility is that we're witnessing the classic signs of a maturing market, but that's a little incongruous with some of the fastest growth in the blogosphere on record.
Competition is another more salient factor. It's hard not to notice the plethora of new ad programs hitting the headlines, in particular Yahoo Publisher Network and MSN AdCenter. Whilst these two new arrivals are currently lagging behind in the contextual market, I think we can expect them to make significant advances in scaling AdSense's dominance. There is also the Chitika factor to consider. In particular the uncanny timing of Chitika's referral banners and the subsequent release of the AdSense referral program within weeks of each other, which does make you wonder whether one was a reaction to the other.
So is the AdSense referral program an attempt to stem a reduction in revenue growth through wider distribution or just the aping of a competitor? Probably a bit of both along with some ramping up of market share before the competition really hots up.
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