Google Enforces Transparency in AdWords Management Fees Charged by Agencies
This morning, Gapture received a policy update notice from Google. The highlight of the policy update includes:
Management fees Third parties often charge a management fee for the valuable services they provide, and end-advertisers should know if they are going to be charged these fees. If you charge a management fee beyond the cost of AdWords or AdWords Express, let customers know. At a minimum, inform new customers in writing before each first sale and disclose the existence of this fee on customer invoices.
At Gapture, we believe in transparency and integrity. We break down the management fee that Gapture charges (30% of the total ad budget) and the ad spending that goes to Google AdWords in all our proposals, quotations and invoices. This is not always in our favour as advertisers (clients) can now see the exact break-down, we have to explain why we charge how much we charge.
There are agencies out there that combine management fees and ads spending into single items. The possible exploit of this billing method is that the agencies may try to place the cheapest ads and profit from the difference. As we know that the quality of online traffic is more important than the price, this type of behaviour can be detrimental to the whole Google AdWords industry. When advertisers don't see the effectiveness of the campaign, they may shy away from Google AdWords for good, not knowing the real cause being the low traffic quality and the lack of transparency in billing method.
We are glad that Google takes this step to enforce management fee transparency in the policy update and it is a good reaffirmation on the values that Gapture believe in. When dealing with Google AdWords agencies in the future, do ask for a break-down of the management fee and ad spending. At Gapture, we also practise passing the Google AdWords account back to advertiser at the end of the campaign, so that the client can audit the ads spent if they choose to.
You may access the policy here: Google Third-Party Policy