Google is focused on performance marketing more than ever before. Since Google finalized the sale of Performics to Publicis earlier in August, the focus of the deal has been on the conflict of interest narrowly avoided from its previous acquisition of DoubleClick. Google is the world’s biggest provider of search and its revenue model is built from ad placement within its search engine and publishers using AdSense. 

Let’s look at foundation. Google’s $3.1B acquisition of DoubleClick in March 2008 expanded its reach dramatically via display advertising and affiliate marketing. The affiliate marketing portion of this deal included capitalizing on the advertiser and publisher base of Performics, a division of DoubleClick.

The most interesting part of March’s deal is that Google effectively jumped into performance marketing overnight – with serious potential to take a huge portion of the affiliate marketing industry. Their newly converted Performics affiliate network stood to “compete” against some of the best known names in the affiliate marketing including AOL’s TradeDoubler, Commission Junction and Linkshare. Actually competing isn’t really the right word – maybe obliterating is. With enormous inventory in search and display ads combined with significant reach via search and targeted publisher traffic – they immediately took action by offering AdWords advertisers a bid on pay-per-action beta tool. Now, advertisers could pay for a lead, sale or other action – rather than just a click. The program gave current Google advertisers an additional competitive advertising stream, while leveraging former Performics advertisers via Google’s targeted publisher base.

The results have been somewhat inconclusive. Little publicity or reporting was done outside of the service’s introduction. The program’s pay-per-action beta was active for a sometime before being merged into CPA bidding tool which Google released prior to the deal (in September 2007) . It was a bold move, but not enough to make a serious threat to other affiliate networks. Sure it takes time to make the transition and we won’t know what bottom line revenue was generated until Google’s annual report will be published next year. Nonetheless performance advertising hasn’t taken the Google’s spotlight.

What really happened in August & September? Details of September’s acquisition show that the SEO portion of Performics was center to Publicis’s interest and eventual acquisition. Selling off the SEO division wasn’t must of a surprise as SEO marketing tactics compete against other channels already operated by Google.

So what does Publicis’s acquisition mean for Google’s stake on performance marketing? With the ‘SEO issue’ conflict of interest out of the way – Google stands to finally spearhead performance based marketing – mainly affiliate networks. Most likely Google’s affiliate marketing services, website names and features will change to reflect the results of the deal.  But over time, the same services and pricing models will be slowly enhanced and integrated into a more powerful Google Affiliate Network. We know now that it’s not as easy as turning on a switch. However, the knowledge, publisher base and advertisers from Performics combined with Google’s extensive reach via search and publisher websites – could be the right combination to redefine performance marketing, control yet another online revenue stream and generate serious revenue.