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Here in Europe, agencies have enjoyed funding from Google. It was there to encourage training and innovation. It's going.
Google has closed the purse strings and I thought I'd write down what this means to me.
This is an 'Andrew Girdwood' post and not a bigmouthmedia post.
It is certainly true say that bigmouthmedia is/was in the elite bracket for the Best Practice Funding (BPF) and so we have put together a more official comment. That might interest you more than this post.
I am keen to write a 'what this means to me' post as this will change the face of search in Europe. Mainland Europe will be especially affected as 'kick back sharing' is far more common.
I really do think Google has been generous by giving us a year's notice as it didn't have to. It didn't have to provide any BPF at all. Mind you, some people will argue that it didn't have to cancel it either. Google isn't poor.
So why did Google offer Best Practice Funding in the first place?
To begin with, it was less of a taboo to call this 'commission'. Google wanted to become firmly entrenched in Europe and wanted influential agencies to encourage their clients to move significant budgets to their Paid Search campaigns.
I would argue that Google had become successful in both of these goals by the time we had Best Practice Funding as we know it today.
No one at Google is supposed to call it commission or kick back. The 'growth kicker' was there to encourage and reward agencies that significantly grew their own Paid Search offerings.
The biggest percentage returns from Google were on new advertising forms - such as Local Business Ads, Video and Gadget Ads would have likely been included too.
Part of the deal was that agencies would spend this funding on training and teaching their staff.
One of the (many) reasons I'm proud of bigmouthmedia is that we did this. We have the bigmouthmedia Academy and a real training programme.
Our Paid Search managers, for example, are all GAP qualified. When you join bigmouthmedia as a new Paid Search manager then you will be GAP qualified in three months and that is not going to change just because the BPF is no longer there.
It is also true to say that agencies used the BPF to lower costs and remain competitive. I have little problem with this. This is, after all, very similar to the bulk-buying power media planners bring to display advertising.
However, I think it was clear that the BPF model was going to be removed from Europe. I can only hope that agencies have not built business models that are dependant on BPF funds.
I have a strong suspicion that the number of CVs which come in via firstname.lastname@example.org may be my best gauge on that.
I also know that it is not uncommon for agencies to simply act as a discount service for some big spenders.
For example, some people manage their own Paid Search accounts, bill through an agency and share the "discount".
The downside to this is that the agency isn't adding any management value, isn't growing its skill base, isn't testing new ideas and may not be useful at all to the big spender once the "discount" goes.
I don't think we'll see any more of those relationships. In the long term, I think this will make agencies better.
It means that every agency will have to work hard to offer the skilful optimisation and bid strategies on accounts rather than the current uneven split between actual "expert agencies" and the discounters. For me, this is a good thing.
Another of the aspects of BPF was that Google promised to talk to agencies more.
I've seen some mixed feedback on that and generally people complain that that does not happen. In my experience, Google talks to me plenty.
That's how we beta test or feedback information to them. I'm perfectly happy that this relationship is not going to vanish by 2009 and I find that reassuring.
So then, what exactly does this mean to me?
It means that I expect a busy year in the Paid Search department, that's good and it means I'm going to be busy.
I expect continued emphasis on skill and strategy. That's also good and it means we also get to keep the focus on my personal favourite - innovation.
I expect more RFIs which, I can safely say, is good. It also means that I expect to be reassuring myself that it is possible to run a profitable PPC campaign - and although there may need to be some adjustments - it will be.
It means I may not see some familiar faces at conferences and roundtables and in (most cases) that'll be disappointing.
Most of all, the removal of the BPF means to me that Google and agencies such as the one I work for will continue to talk.
When I get excited about something funky and new that the search engine is doing (like the gadget ads) then Google will know I'm excited about the funky and new idea - rather than the "don't call it" commission.
For me, on a personal level, that's funky, new and I look forward to it.