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Google's SEM Agency Epiphany

  |  April 30, 2010   |  Comments

Google's new certification program and changes in API fees are good for advertisers, but Google's partner directory is in need of additional work.

For many years, Google displayed a form of multiple personality disorder when it came to the agency community (both SEM agencies and interactive agencies generally). Those within the Google business unit tasked with managing the agency community often understood the dramatic value a good agency could deliver in both strategic and tactical terms. Yet others within Google saw (and perhaps still see) agencies as an unnecessary impediment to Google getting access to marketing budgets. It's actually possible to find data to support both points of view - the first holding that agencies are a valued part of the online and SEM (define) ecosystem, and the second viewing them as incompetent to appropriately steward their clients' dollars within SEM or within other new forms of media.

For example, I know that for many years my teams and those at competitors which I've admired have raised the Google spending levels for clients at a far greater rate than Google's overall revenue growth rate. That's a testament to the value delivered though expertise, the heavy lifting that accompanies any hands-on campaign team effort, and in some cases, through the streamlining of campaigns using technology. Conversely, we've all heard of the horror stories of agencies that consider PPC (define) search as a mere accommodation to clients for which they are agency of record. In those cases, PPC search engine advertising represents a checkbox, i.e., "yep, we do search engine advertising" or "sure, search is taken care of," approach; not a living, breathing, and evolving willingness and capability to produce paid search campaigns that consistently improve.

So here's why Google's new initiative is so great for agencies and clients. It addresses the issues above, rewarding the agencies that do a sufficiently good job to get certified, and at least raises the bar for any agencies that until now have gotten away with sub-par practices in paid search advertising. Improved training resources will be a big part of Google's AdWords Certification Program (at both the individual and agency level). At the individual level, Google is not certifying individuals but rather stating that individuals can be AdWords Qualified.

Personally, I'm also pleased to see API (define) charges virtually disappear via "preferred AdWords API pricing" for those demonstrating the necessary competence to get certified. The last thing the search ecosystem needs is an ill-conceived "tax" on API use. I continue to firmly believe that API fees are not the best way to ration API bandwidth, which is a valuable but scarce resource. Earning API cycles with spending makes much more sense as a solution. For those of you who remember the initial API charge debate, I was an advocate for non-fee-based API management schemes. As SEMPO chairman at the time in January 2006, I wrote a letter to Google (accompanied by many SEM providers and agencies) discussing the alternatives to API fees. It's great to see that nearly everything we requested in the letter is being addressed now, four years later (better late than never).

Now for the details of the certification program. Google recognizes that even though AdWords is the core of its business (and revenue), that education and certification need to extend beyond the AdWords portion of its business. The AdWords Certification Program is one of a broader set of partner programs, which include Analytics and Website Optimizer as well.

There is still room for the bar to be raised within Google's Partner Search functionality. Agencies, unlike individuals, can't be graded based on one individual's competence or by completing an online test for which they might have been coached or that they might even have fraudulently taken. Google provides a partner search functionality, but essentially disclaims its value, stating:

"Google makes no promises or representations about the performance or quality of any of the businesses or companies listed in Partner Search Engine. The listing order is based on the experience partners have managing similar budgets and industries in AdWords. The ordering may change over time as we include additional criteria to further refine results. Google doesn't charge for inclusion in this directory or accept payment for better placement."

So then, how should an advertiser use a partner directory and how should Google improve on the existing directory? It is certainly useful to know how long an agency has been in business. However, from an advertiser's point of view, it is often more important to understand how many staffers an agency has and, more importantly, how important that advertiser will be to an agency's overall revenue.

Google also needs to move from self-reported agency data and use the fact that Google has the API information on most agencies that have their own technology. If there is a way to validate and authenticate client testimonials, that might be a great feature as well. But agency directories in nearly every industry have failed to provide significant value because they get gamed, and if there's any industry that knows how to "game an algo," it's the SEM industry!

While the directory of Google AdWords Certified Partners may not yet be where it ultimately should be, the latest changes in API and training from Google represent a stride forward and have been accompanied by a stated change in philosophy within the company. Some people may be skeptical and think that the changes have been driven by the U.S. Department of Justice and the Federal Trade Commission's scrutiny of Google practices, not an authentic change in corporate philosophy. I'll take them either way.

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ABOUT THE AUTHOR

Kevin Lee

Kevin Lee, Didit cofounder and executive chairman, has been an acknowledged search engine marketing expert since 1995. His years of SEM expertise provide the foundation for Didit's proprietary Maestro search campaign technology. The company's unparalleled results, custom strategies, and client growth have earned it recognition not only among marketers but also as part of the 2007 Inc 500 (No. 137) as well as three-time Deloitte's Fast 500 placement. Kevin's latest book, "Search Engine Advertising" has been widely praised.

Industry leadership includes being a founding board member of SEMPO and its first elected chairman. "The Wall St. Journal," "BusinessWeek," "The New York Times," Bloomberg, CNET, "USA Today," "San Jose Mercury News," and other press quote Kevin regularly. Kevin lectures at leading industry conferences, plus New York, Columbia, Fordham, and Pace universities. Kevin earned his MBA from the Yale School of Management in 1992 and lives in Manhattan with his wife, a New York psychologist and children.

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