If I remember correctly, the introduction of the rel="nofollow" tag in 2005 was a collaboration between Google, Microsoft, and Yahoo, with all three search engines agreeing in advance to its format and proper uses.

But I believe that google acted alone in introducing the rel="sponsored" tag, and don't know how other search engines treat it.

The nofollow is still fine to use according to Google [twitter.com...]

So what happens if a site addresses this today? They can skip the potential penalty from Google or is it based on older data?

You can't fix this in a single day. Google is wiping out link power that they deem to be ill-earned. That means an impacted site would need to build high-quality backlinks to replace that lost link power and takes a good bit of time. If you take shortcuts, you more likely will build links that don't have link power and may even trigger other spam penalties.

I remember someone from Google (Matt Cutts? John Mueller?) saying a number of years back that Google was pretty good at identifying and ignoring affiliate links. Certainly it should be a no-brainer for Google to recognize something like an Amazon or Booking dot com affiliate link.

That doesn't mean it isn't a good practice (and common sense) to mark your affiliate links as "sponsored" or "nofollow."

Hit by this thing. Going to change 'nofollow' to 'sponsored'. Not a time intensive fix and would rather follow what their blog says versus a tweet. Call me old fashioned.

Separately, we are a couple decade site here....I think it's possible a lot of old links were discounted with this update. Meaning, what was common 10+ 15+ 20+ years ago is now discounted to nothing. Never bought links.

Google is wiping out link power that they deem to be ill-earned.

Sure, why not.. however I do think there's a paid traffic alternative, it's called "adwords".

Think about it...

I do think there's a paid traffic alternative, it's called "adwords".

At the risk of sounding pedantic, I'll point out that the Adwords name was retired two years ago. :-)
[support.google.com...]

lol...that's alright. I still think of Doubleclick for publishers and AdMeld (later AdExchange) when I think of Google Ad Manager.

I think most of us on WebmasterWorld are now multi-decade folks in the industry :D

"AdMeld"? I'd forgotten that one. I guess I've reached the point where I'm old enough to remember the good old days if only I could. :-)

What do you think future affiliate sites will be like with this change? Do you think they'll still be profitable or able to sustain income?

At the risk of sounding pedantic, I'll point out that the Adwords name was retired two years ago. :-)

Thanks, as a side note you seemed to have almost got my point... Google wants us (me) to know there's always the approved option of advertising directly with "Googleads" as opposed to buying non-google links for traffic.

What do you think future affiliate sites will be like with this change? Do you think they'll still be profitable or able to sustain income?

This should not affect it just now, it's just labelling.
Google says...

In general, using affiliate links to monetize a website is fine.

The problem for Google is they don't get a slice of the income. Being negative, if everyone makes the modification, potentially, Google could more easily "adjust the traffic" to its own needs, pushing affiliates to an ad-based approach.

Being positive, these sort of things are good to know.

The problem for Google is they don't get a slice of the income. Being negative, if everyone makes the modification, potentially, Google could more easily "adjust the traffic" to its own needs, pushing affiliates to an ad-based approach.

Yes, nicely put.

For myself, the question I pose is just how far will G go to push "an ad-based approach" for revenue focused websites. My perception is that the July Core Update indirectly slaps SEO spends to the lower side of ROI and creates an urgency to return to the top of the serps. Obviously, "an ad-based approach" gets you there quickly.