Google enforces transparency for Google Adwords Partner Agencies
We just received a notification about an update to third party policies at Google concerning Google AdWords Partners. You can read the details about the changes at https://support.google.com/adwordspolicy/answer/6086518
This is a significant shift in the world of AdWords agencies, and the question begs to be asked: Is this just a first step with more to come in the near future? Google will now enforce transparency for all AdWords agencies concerning administration fees clients are charged. To control the situation, Google may ask an AdWords client about his customer ID. Wait!?
Of course Google already knows the Customer ID of every client. However, in the past Google did not contact clients of Google partners. In such cases, client accounts were linked to an MCC, the Client Center for AdWords agencies.
The new changes now enable Google to get the customer ID of every client. If the client does not have that ID, Google may revoke the partner status of the agency. And by contacting clients, Google has the power to give the client access to the AdWords account and detail the fees Google charges regarding Google AdWords. Additionally, Google may ask about the fees an agency charges on top of the AdWords fees.
There is a short but important sentence in the new policy:
The English version states that the agency must tell their clients that such a fee exists in their invoices. But the German version states:
This means that the invoice must contain the exact amount of that management fee in the invoice. We are not sure if this just a translation issue.
In the past we have seen cases where AdWords agencies charged fees 100% or more of the budget spent at Google (in addition to the AdWords fees!). For small clients with a budget of $300.- or below, this may be considered fair, but for clients with much larger budgets, the fees should normally be between 5% to 20% of the budget. But there have been cases where the client did not have access to the AdWords account and had no knowledge or control over the agency and fees charged, as well as changes and more. Thankfully, this isn’t the standard case, but naturally it still occurs.
With the new implementations, Google will enforce more transparency, which is an advantage and a step in the right direction. The market shouldn’t tolerate agencies with unfair fees. But still, we should be concerned if additionally steps will be implemented. In the end, will Google attempt to manipulate the market? Agency fees are necessary for administration, but obviously Google wants as much of the budget as possible. High fees charged by a middle-man decrease Google’s income. What will Google do when they believe the fee is too high? Will they inform the client? Will they offer their in-house service directly?
This is a dramatic change in Google’s policies. Fair fees are necessary and no one should be ripped off by agencies. However, if Google’s past actions are any indication, it’s highly possible that AdWords agencies will get more competition from Google and their services. Are you an AdWords agency? What do you think?