Google Says "No Commission for You"

A little of column A, a little of column B

Although it seems the agencies (big ones at least) LIKE the idea?

I think the 'charge as a % of spend' is a bit flawed anyway, as it gives the agency motive to spend more, not less...

Yeah, couldn't figure out who really wrote that article. ;)

I can't imagine anyone liking a loss but with the biggies I guess spin is dollars too so make it sound like a positive.

I dunno, if my competitor tells the client "we'll split the 10% rebate with you", suddenly the 10% agency commission is a commodity game... would rather charge a flat or hourly fee if it were me...

The article states that Carat manages more AdWords spend globally than anyone else, but that is total, utter hogwash. They *may* be top ten, but I'd bet more like #25 or so.

I would bet that eBay, Amazon, and IAC being right up near the top.

I've certainly argued this point myself, though the model of % of spend has worked for ad agencies for years.

It definitely does have its flaws, although I don't know that there *is* a much better model other than performance or project based models...which is difficult to setup for new shops, and often more expensive (or perceived as such) for customers.

I tend to think hourly is a good model too, but even then the agencies are incentivized to work sloooooooowly.

I'm not in those trenches, but since the costs of poorly or unmanaged PPC can soar so quickly, isn't this a good first step to enable project-based and/or negotiated fees? I'd think it was very good news.... now as a PPC manager I could price according to the depth of the pockets and effectiveness of fud, power of my brand, etc.

G now has the same model as Wal-mart:
Remove market friction - I.E.
No one will make money except those who are assimilated into the borg after your vertical is thoroughly dismantled and reconstructed "efficiently".

Get the agencies to eat the little guys, then eat the agencies. Sound strategy for a corporation hell bent on world media domination imho:)