Google to Eliminate Agency Search Fees

Along With New Certification Program, Change Is Part of Web Giant's Charm Offensive for Bigger Ad Budgets

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NEW YORK (AdAge.com) -- Google will announce Monday it is eliminating the fees it has long charged agencies to tap into its search ad auction system, removing an annoyance and potentially encouraging a new round of innovation among smaller search advertisers.

Both Google and Yahoo instituted fees for agencies early on to discourage shops from needlessly re-setting campaigns and over-taxing the system. But those practices have waned as agencies have gotten more sophisticated. Yahoo recently removed its fees to agencies.

Cutting the fees is the latest in Google's ongoing charm offensive toward agencies, which has become a greater priority over the past year as the search giant has moved into display and attempted to drive more agency adoption of its analytics, ad serving tools and ad exchange.

"A lot of people on the agency side have been frustrated that we are charging for our APIs," said Penry Price, Google's VP of agency development. "We want to remove a disincentive to innovation."

Certification program
In addition to killing its fee structure, Google is launching a new certification program for agencies that it says will be more rigorous and a directory system to help marketers connect with agencies that complete the program. Small and mid-sized partners that may not work through an agency will be able to search for a partner that fits certain criteria, such as location, agency expertise and their marketing budget.

Search firms have long chafed at the fees, and equated them to a needless tax on the agency business, especially since Google has not charged the fees to marketers who are directly using their system, such as eBay. But some agencies said the bigger deal is the certification program, and Google's new focus on its relationships with agencies.

"They are going to add a little more support infrastructure and, for lack of a better term, pay a little more attention to the agencies," said Kevin Lee, CEO of search marketing firm Didit, who was briefed on Google's plans.

The catch here is, to have fees waived, agencies will have to become "certified" partners under the new system. "Removing a fee structure means agreeing to be told how to conduct business," said Kevin Ryan, CEO of Motivity Marketing. "Not agreeing means being left out of the potential certification revenue party."

Google was only charging the fee to agencies, and only those agencies using their own bid management software. Google co-founder Larry Page is said to have pushed the fees to combat what one agency exec described as "stupid players building stupid technology" that did things such as changing bids for thousands of keywords every ten minutes, unduly taxing Google servers.

"The big deal for us is the focus on agencies and third-party providers," said David Karnstedt, CEO of Efficient Frontier. "Companies like ours invest a lot of time and resources into making our technology connect with Google."

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