Google Changing Agency Commission Payments In Europe

Many search marketers in the US are unaware that in Europe, both Google and Yahoo offer agency commissions. Today, Google has announced plans to restructure that practice. The Google press release on the move hasn't yet been posted in the Google press release area, so I've reprinted what I was sent below. The longer edition of this post for Search Engine Watch members has more information on the move, including:

  • The new program opens across Europe from January 2006 to any qualified third party agency (at least five clients, two Google certified professionals on staff).
  • Google does NOT consider the new program to be paying commission but rather having a "best practice funding element."
  • Payments will be tied to business brought in or grown and tiered to a maximum of 12 percent
  • Yes, search marketing firms are eligible.

For more, see the members' version of this post (or become a member and help support the site and this blog!).

See also the Agency Commission Or Discount Offered On Search Ads? thread in our Search Engine Watch Forums for discussions of payments in Europe and how they don't happen in the US.

Postscript: Here's additional info Google has sent (press release comes after that):

  • From 1st January 2006 there will be no agency commission i.e. All advertisers will be on a level playing field.
  • The Google European third party programme is a drive to empower 3rd parties in the delivery of best practice within the field of search marketing.
  • The best practice funding element is a criteria-based scheme which aims to provide investment for third parties from Google in order to drive their search marketing capabilities forward and grow the industry.
  • The scheme is optional and does not involve any discounting of the Google advertising model - a deliberate move aimed at achieving transparency and integrity for the adwords auction model.
  • The criteria for qualification are not solely financially based and include mandatory adoption of our My Client Centre. Third parties must also meet Google Advertising Professional quota requirements in order to qualify.

Here's the Google press release:

London - September 28, 2005 - Google Inc. today announced that it has introduced a new program aimed at empowering third parties and delivering continued value to advertisers of all sizes. This new industry program will be available to all qualifying third parties across Europe from January 2006.

Under the new Google European Third Party program, Google will deliver training, tools and support to third parties, enabling them to deliver more value to their clients. By reconfiguring the previous practice of giving agency discounts and introducing best practice funding, this new program will level the playing field, allowing advertisers of all sizes to fairly compete in Google's auctions based advertising platform.

"Google's new program empowers third parties to more efficiently and effectively serve their clients. Third parties are critical to the success of advertisers and to Google and we have designed an approach that favours both," says Nikesh Arora, Vice President of European Operations at Google. "We firmly believe that it is important to preserve the integrity of the channel in terms of marketing effectiveness and advertiser perception. By fostering greater equality across Google's auction model, advertisers of all sizes can more effectively compete against each other," he concludes.

The core elements that Google will now provide its third parties are:

  • Tools to increase third party efficiency and effectiveness
  • Training and market research
  • Process enhancements such as wholesale upgrades to our commercial processes to ensure that our processes are aligned to our third party business models
  • Extended service and technical support
  • A quarterly best practice funding program for investment in training and platforms which aims to provide financial support for those third parties who fulfill our quality and investment scale criteria

Designed to boost the quality of search marketing operations, and safeguard the integrity of the channel, this program encourages third parties to deliver quality advertising results for users thereby improving marketing effectiveness, clients ROI and advertiser perception.