IPA Storms Google over Agency Commission Cuts

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IPA wades into Google commission row
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The UK's IPA are addressing concerns over Google's plan to scrap all agency commissions. As anyone who works in the ad sector will know, agencies take their cut, very very seriously, and from the wording coming out of the IPA, they're gunning for Google over this.

Apparently they still intend to give financial rewards by "best practice funding" which doubtless equals biggest spenders - that's best practice from Googles perspective not the Advertisers.

The IPA are now getting involved and are concerned because it will lead to an "unlevel playing field". Well, I am sorry to say it's been that way for ages since Google have been restricting commissions paid to new agencies for at least 18 months... I know, it nearly killed our business.

Our agency lost its largest client at the end of last year because we were undercut by a larger agency who were receiving a 15% discount from Google and they agreed to give back a percentage of the clients spend. So much for an even playing field?!

Google's refusal to give us the standard agency discount at that time meant we could not compete on price and unfortunately that's the only thing some clients can see... and some of them are extremely hard to educate...

Hopefully the uncertain nature of the payments will mean that nobody will be offering partial discounts to their clients for PPC advertising... time will tell.

Comments

I don't understand why any

I don't understand why any client would chose an agency that have a comission agreement with Googler under the current conditions as it looks to me like most of the agencies around that gets such comissions are brain washed Google dolls more focused on living up to the terms of the agreement instead of making the most money for the clients. Bribed people can't be trusted :)

Yeah

The ones that let the Google 'optimisers' 'optimise' their campaigns.

We had one once.

We were bidding on 'mortgages' etc and they thought it prudent to add:

'mortgage solicitor' and
'remortgage solicitor' etc

To our campaigns. And, to be fair, a lot of other similar occurences which if we hadn't picked up would have run and run, eating PPC budgets.

This was in the UK - and believe me DID happen.

>> and believe me it DID

>> and believe me it DID happen.

Hah, I believe you andy ;) I've the results of Google "Maximising" other large scale campaigns too.... shocking. Hopefully the recent reorganisation by vertical will gradually improve matters, as at least the people dibbling with the account should understand the industry in general

No Sympathy Here!

Having been consistently ignored by Google's reps in London ever since they first opened their offices and with any request for agency status ignored (with not even the courtesy of a response saying "f... off") I fail to see how this move is removing the "level playing field" alluded to.

It was never there to begin with!

Now, perhaps, it can be equally unfair to all :)

Both Yahoo!/ Overture and

Both Yahoo!/ Overture and Google's method of dealing with 'Agencies' is broken.

If a client deals with a 'big media' agency - the current system is that the billing goes through the 'big media agency' - and the account is in the name of the 'big media agency' - not the client. And the 'big media agency' gets the commission.

And if the client later chooses to either use a specialist SEM agency - or do it themselves inhouse - the client is screwed. Why? because the CTR in Adwords has to start all over again in the new account....

Why would Yahoo!/ Overture/ Google encourage such a broken business model?

Then you've got the 'level playing field' issue - where the big media agencies can take their percetage - share it with the client/ use it compete against 'media cost plus management fee' agencies.

This is from an old post on this subject that I made at SEW last year:

Its actually a broken business model, the way both Google and Overture have implemented it in Australia.

In my experience, it is totally inconsistent in its application. If you are an 'old school' agency - under the 'old' model of Media Accreditation - guess what - you get the backhander. ie 2 agencies - identical spend - one gets the backhander - one doesn't. Totally inconsistent.

And lets not even discuss the "media buyer accreditation" dinosaur......

There is a solid business case for a 'trailing' commission structure (the model used in many financial services markets) to be implemented by Google and Overture for SEM companies, who set up client PPC accounts, and manage these accounts for clients.

A trailing commissions structure process would allow for Overture/ Google to have a direct relationship with the end user client, from a billing/ credit perspective, (which is really what they want) and allow the SEM to add value, and get a small annuity share of the revenues for the customer they introduced and manage on a day to day basis.

The problem is - neither Google or Overture have actually realised the leverage this will offer in the market yet.

The first one to wake up will actually win.....

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