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?

___

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

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18 Responses to “Rumor: Google AdWords Reseller Program Ending?”

  1. Mike Stewart Says:

    Greg,

    After spending the last 7 years working with SMBs on Google Adwords campaigns in Dallas Fort Worth for both the clients existing campaigns as well as attempting to improve the extremely over priced and poorly planned efforts from a reseller, I think that transparency is exactly what Google needs to do to protect its brand. Charging 700.00 per month management fees for 2k per month SMB budgets is only something an over priced expert or YP provider with fat margins and commissions would charge.

    It is time Google protect its brand and realize that when a reseller provides a bad valuie it reflects on Google.

    I charge 199.00 per month to do basic campaign mgmt for Google and Yahoo accts. I also sell my buildouts by the hour.

    A former district attorney of Dallas was told by SuperMedia that criminal attorney clicks are $25 to $33 each…… he is paying $11 each and in 3rd position with his own acct that I built and manage……..

    In my opinion he was lied to.

    It is a FACT that SuperMedia campaign managers have a 85% burn rate requirement to justify mgmt fee……why not focus on ROI? Reason? Smoke and mirrors and nice margins for mgmt bonuses by executives plundering the company treasury.

    My 2 cents.

    Cheers,

    Mike Stewart

  2. David Rothwell Says:

    I completely agree with the above post – churn is bad for Google.

    I think we can rest assured that they are fully aware of what their adwords account holders are doing, and by implication how they are being treated by their management agencies.

    I know from my own experience that clients will move around, and that sometimes what I see as a result of agency management sometimes are horror stories.

    Given that Google is also creating a directory of certified practitioners, and that they can also be reported by users, means they are beginning to take the channel very seriously and cannot afford for their brand to be tarnished with poor practices.

    their strengthening of the certification process also supports this.

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  9. TheMegaSuperGuruOfAllThingsGoogle Says:

    It is unfortunate that the partnership between Google and the Resellers has come to this however the reasoning behind it is simple.

    1.) Google feels it’s advertising product is being defaced by larger non-qualified Adwords Management companies that are loading up accounts onto one campagin manager and expecting success from each one. The churn rate is directly affected by a series of variables including high number of accounts, little to no real training in proper SEM methodology and having little say in what types of accounts are being sold out there.

    2.) The cost plain and simple. Google cannot possibly like that 30-45% Management Fees are becoming more rampant by these SEM providers in that clients do not spend their full budget and are left swallowing a large management fee in conjunction with what clicks they did accrue.

    *There is talk of offering API access at a cost to these Resellers but I just can’t imagine that being the solution to the point that Google (I believe) is trying to make.

  10. Hayden Says:

    40-50% mark up? 200-300% mark up is what some of the resellers are charging unexpecting SMBs. RL, Yodel, At&T all will keyword the SMBs own name, charging $4.00 per click on a .50 bid. Google is getting a very big black eye from these resellers that have huge, high pressure sales forces that use Google’s name to open doors and close sales and not to sling too much mud here, but their tactics are nothing less than unethical. A lot of SMB’s will tell you they have tried advertising on Google and it didn’t work. They can’t realize an ROI from this mark up.
    It is time for Google to take control of their brand and do some “ethical cleansing” by forcing visibility.

  11. Greg Sterling Says:

    Hayden:

    You’ve captured the sentiment that I’m sure is exists w/in Google.

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  15. David Rothwell Says:

    I completely agree with the above post – churn is bad for Google.

    I think we can rest assured that they are fully aware of what their adwords account holders are doing, and by implication how they are being treated by their management agencies.

    I know from my own experience that clients will move around, and that sometimes what I see as a result of agency management sometimes are horror stories.

    Given that Google is also creating a directory of certified practitioners, and that they can also be reported by users, means they are beginning to take the channel very seriously and cannot afford for their brand to be tarnished with poor practices.

    their strengthening of the certification process also supports this.

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  17. Mark Kelly Says:

    Greg – I know this post is super-old, but do you know the latest on this. The Google Adwords Reseller program seems alive and well as far as we can tell – http://www.google.com/intl/en/ads/premiersmbpartner/partners.html . Is Google still giving them big discounts on click costs?

  18. Greg Says:

    Mike: yes the program is alive and relatively well. I think that some partners still get these deals. Not sure of the precise details.

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