Rumor: Google AdWords Reseller Program Ending?

The Google AdWords reseller program has been a significant part of the local SEM landscape, enabling publishers, verticals and independent sales channels to gain credibility pitching SEM programs and packages to the local market. Here’s the current list of resellers. It includes AT&T, AdReady, Atlanta Journal Constitution, Citysearch, Clickable, Comcast, Hearst Newspapers, Network Solutions, Orange Soda, ReachLocal, Dex One, SuperMedia, YPG, Yellowbook and Yodle, among others. 

There has always been a certain tension between Google and some of its partners over margins and the percentage of advertiser spend going to buying media. Some of the partners seek “print-like margins,” while Google sees much smaller margins as being appropriate (agency like margins).

In the past couple of weeks there has been a rumor that the program is being shut down by Google:

Asked about this Google issued the following statement:

“The Google AdWords Authorized Reseller Program is still active. We remain committed to building relationships with third party partners that enable small and medium-sized businesses to realize the benefits of cost-efficient, targeted and measurable online advertising solutions like AdWords.“

Earlier this year there was a rumor that Google was compelling, as a condition of certification, reseller partners to disclose to advertisers the percentage of the advertiser spend that was actually going to media vs. margin. Assuming this is accurate, it seems to be a response to the churn problem where some partners pocket 40% – 50% of the ad spend, for example, leaving not enough money to really deliver for the local advertiser — resulting in frustration and churn. 

If Google were to shutter the program it would not be the end of local SEM by any means. Resellers get a suite of services from Google:

However SEM buying could still be done in much the same way it is today. What would be lost is the “credibility” that comes with the certified reseller status. Again, Google has said the program is operating and that it remains committed to it. 

What do you know or have you heard?

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Update: Someone wrote me privately and said that there were significant benefits to being a reseller . . . having to do with API account creation and related benefits. Here’s what he said:

The two repercussions of losing reseller status for large Adwords resellers would be the following:

1) Having to pay to use Google’s API. Currently resellers enjoy free API transactions.  At high volumes those costs are significant.

2) Not being able to create accounts through the Adwords API.  Here again, only resellers enjoy the benefit of being able to create a new Adwords account through the API, and when you’re talking about large volumes, forcing a reseller to create that many accounts by hand removes economies of scale