Google to Withdraw Payments to European Agencies

24 September 2007

MOUNTAIN VIEW, California: The increasingly omnipotent Google, like the Lord in The Book of Job, both "giveth and taketh away".

But European ad agencies, aware that the withdrawal of the search titan's Best Practice Funding programme will deprive them of around £50 million ($101m; €71.8m) annually, are unlikely to emulate Job's chorus of "Blessed be the Name of Google."

The expenditure-based funding scheme was launched by Google across Europe, the Middle East and Africa in 2006 in an attempt to overcome agencies' reluctance to place ads in a medium that offered zero commission.

Having withdrawn its original commissions scheme in 2005, Google introduced a new system, that linked a quarterly payout to a sliding scale of billings.

Additionally, it demanded schoolmarm-fashion that agency online buyers first qualified as [!] Google Advertising Professionals. In the UK alone, some 2,000 have done so.

However, Google has unilaterally decided that the payouts will cease at the end of 2008.

According to Damian Burns, who heads agency relations for Google EMEA: "Agencies are now at a level where they don't need a subsidy. Everyone should be equal in an auction system. There shouldn't be buying clout; the value for clients is in how well agency campaigns perform."

The move exemplifies Google's present market confidence - arrogance some say - founded on its present primacy in search advertising.

Both its main rivals, Yahoo and MSN still offer agency commissions of 10%.

Data sourced from; additional content by WARC staff