I just read about this piece of news a few hours back and it is a real surprise to me. It surprised me because of my “incorrect” understanding of how Google Adwords Business model works.
From what i knew previously, Google has three main business units promoting Adwords
- OSO or Online Sales and Operations. This unit is in charge of “Do it yourself” type of advertisers. They take care of those advertisers who go online and sign up with Google Adwords themselves.
I am not sure if this unit is behind the “Live chat” function embedded deep in Google Adwords interface a few years back. What happened was that i used to log into Google Adwords and chatted with live support person, mostly related to image ads approval a couple of years back.
- DSO or Direct Sales and Operations. This unit takes care of all big brands (blue chip clients). The idea is that blue chip clients tend to spend much more money on marketing/advertising and so Google wants to have direct relationship with these clients by providing good account management services
By right, all the big accounts (banks, telco, etc…) should be handled by this team (as per my previous understanding)
- Google Authorized Reseller: I used to think that Google uses Reseller to tackle SME market where the monthly budget tends to be smaller. However, they would need more support than “Do it yourself” advertisers.
Working in SME field requires resellers to have hundreds of clients in order to survive. Resellers are supposed to charge a one time set up fee and on going (monthly) account management fee.
Because of limited monthly spend, Google provides agency rebate for these resellers upon hitting certain target.
Resellers by right are not supposed to touch big brand names because they belong to DSO “territory”
In the UK, Google has only 1 reseller left Infoserve. In Australia, Hot Goanna is the only one.
While there are a lot of well known Digital Agencies in those mature markets, not many of them are Google resellers despite the fact that Google only provides rebate to Reseller, not to normal agencies.
Well that is my understanding until now that i know TravelClick just became Google Adwords Reseller. It looks like because of the global economic crisis, Google started to change their strategies.
TravelClick is an established Digital Marketing firm, specializing solutions for hotel chain worldwide. I guess because of that Google wants to leverage on their existing clientele to push more revenue for Google products.
Before becoming Google Adwords Reseller, I guess (THIS IS MY HUMBLE OPINION ONLY) TravelClick was more liberal about how they allocated client budgets on various search engines, platforms, products. Now that they will receive rebates from Google for hitting specific revenue targets, i would assume that naturally more Google products will be pushed towards existing customers.
Of course we (outsiders) don’t know about the details of this deal. However, i knew of certain Google Reseller Deal in which the Reseller is NOT allowed to use Yahoo/MSN or any other search engines but Google. It’s more like an exclusive deal. In a way this is quite limited to clients because of the fact that while Google is vastly popular in many markets, there are still certain parts of the globe where Yahoo, Naver, Daum, Baidu or other search engines are more popular.
North Asia region is one example where we see that average CPC on Yahoo HK is normally much cheaper than Google HK.
On another note, using only 1 search platform for client campaign can be very rewarding for agencies in terms of human resources. I’ve spent considered amount of time on Google Adwords platform (is it a given :D), Yahoo Panama, MSN AdCenter and Baidu before so it’s safe to say that Google offers the most robust system to manage online campaigns. It is more efficient and more importantly saves a lot of time and effort for agency people (poor me still have to use all the different platforms!). However, more often than not, we find that while other platforms are far less superior compared to Google, even in the case of lesser traffic and so on, the Return on Ad Spend can be quite good if done correctly. So using 1 search engine only may not be the perfect solutions for every client.
Well, let’s wait a bit more and see whether we see more Google Authorized Resellers deals coming up. If these deals are exclusive then i am seriously worried for Yahoo, other search engines or even some direct clients.
What do you think?