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Reselling SEM: Google Walks the Line

boland-michael
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Google's Director of Global SMB Reseller Partnerships, Todd Rowe, took the stage to do some fence mending two weeks ago, during BIA/Kelsey's Directional Media Strategies conference.

Seven weeks into the job, his directive is to foster relationships with the various reseller channels that help Google sell search marketing to the massive but elusive small business (SMB) segment.

This includes yellow pages and smaller independents like ReachLocal -- key components for Google and just about anyone going after SMBs. As the saying goes, local advertising isn't bought, it's sold (at least in terms of scale).

Go It Alone

AdWords Authorized ResellerAs background, Rowe's outreach to the reseller community is partly in response to the backlash resulting from Google's folding of its Authorized Reseller Program this past spring.

Among other things, this program made it easier for large resellers to provision and manage multiple accounts. With the thought that many resellers were gouging advertisers with exorbitant markups (and a few other reasons), Google pulled the program.

Since then, Google has made many efforts that indicate a desire to go direct with SMBs. For obvious reasons, direct advertiser relationships are more economically attractive. Moves have included the transition from the Local Business Center to Google Places.

Places represents a simpler value proposition for SMBs to claim and populate listings, and of course advertise. The latter includes AdWords as well as the newer and simpler flat-rate pricing of Tags.

SMB enticements for Places also include interior photography, the cost of which (i.e., photographer visit) Google shoulders. It could also be argued that Google's rumored on-site checkout hardware is likewise a play towards direct SMB relations.

Todd Rowe at DMS '10

Go Both Ways

But in an effort to hedge, Google also doesn't want to burn the reseller bridge altogether. It seems to realize -- as Rowe's message indicated -- that it shouldn't bite the hand that (partially) feeds it. He admitted 77 percent of SMBs buy ads from physical sales reps.

"The value of the channel to Google is reach, local expertise, and product innovation," he said. "We can get to $20 billion without a channel, but we can't get to $30 [billion” or $40 billion. We need the channel to scale."

Among his action items is a brand-new "Global Partner Council," announced for the first time at the Kelsey conference. It will select resellers across various media to meet with Google execs on a biannual basis to express concern and feedback.

The rest of his directives tied back in some way to better reseller communication. This includes boosting his department's headcount, as well as lots of listening and informing. The latter translates to giving businesses a heads-up about the product roadmap.

This resulted in some skepticism, given that it doesn't line up with Google's persona in nearly every move it's made since it went public in 2003. Other points of friction included Rowe's assertion that transparency to SMBs would be required going forward.

Transparency includes everything they're paying for -- even resellers markups. This didn't go over well with resellers in the audience whose current models face considerable disruption from such a move.

Talk is Cheap

This will be an attitude Rowe continues to face as he settles into this position. His message will also be met with skepticism from companies that feel burned by Google's disruptive (and sudden) moves in the past.

Despite this skepticism, most resellers will be compelled to continue working with Google because they basically have to. This is also a tough spot that exacerbates any reseller bitterness of lack of trust. And who can blame them?

Rowe's claims at the Kelsey show were indeed met by a few smirks, shaking heads, and even heated challenges. But he seemed earnest in responding with an "I don't blame you for thinking that" attitude -- appreciated, even if other parts were hard to believe.

"Trust earned, not asked for," he said. "Let us walk the talk and earn it. Talk is cheap, let us show you."

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