About those Yellow Pages ads...

[derrickm]

I see Google's been hauled in front of the Competition Commission for allegedly trying to steal the Yellow Pages Adwords account from Entelligence...

http://mybroadband.co.za/news/index.php?news=5091

Derrick Markotter

[Dave A]

One crux that isn't covered anywhere so far is why Google is terminating the account of Entelligence. The stories are shaped to suggest it is because of competition for the TDS account, but shaping perception is part of their business.

I went scrounging around for the Google side of the story - it seems when it comes to Google SA, presenting their side of the story is not a common occurence. However, I did find this:

UPDATE: Google released the following statement in reponse to questions from Moneyweb: "Google has strict professional protocols for working with agencies and clients in South Africa and around the world, these were developed specifically to ensure that a fair and open business model continues to be in operation. The claims put forward are without merit."
from Moneyweb here

Basically, they'll wait to hear the ruling before saying much in public about it.

There is a rather elegant solution though - let TDS set up a direct account with Google and Entelligence continue as a consultant/agent for TDS and administer the advertising. Key to sustainable business is to act in the best interests of the client!

PS. for the anti-Telkom fiends out there, please don't click-bomb Yellow Pages adverts on this or any other site. You might think you're striking a blow against Telkom, but actually Telkom will end up getting their adverts for free and you'll be causing major problems for me as a publisher of Google Ads.

Just a polite request...

[Dave A]

Hmm. Something else to note. One of Entelligence's complaints is the CPC bid has increased from 60c to R2.00.

I did some quick maths on earnings from Google Adsense here on the locations where Yellow Pages ads are coming up and you'd need a bid of around R2.00 CPC to make the bottom banner. If anything, the average CPC is even higher.

[derrickm]

I think Etelligence are claiming that Google went into their account and changed the bid amount to R2.00:

On 25 June 2008 Entelligence met with Google South Africa to discuss the maximization of traffic to the Yellow Pages website. Clear actions were agreed upon to jointly cooperate in increasing advertising performance. However, that evening Google South Africa edited the Cost Per Click for every Yellow Pages advertisement from 60 cents to R 2.00 without notifying Entelligence in advance. This unauthorized and unethical behaviour jeopardized ad performance and the net effect of this action on Google’s part was to drive expenditure on the Yellow Pages account upwards.

On 26 June 2008 Entelligence rectified these changes on the Yellow Pages account and voiced their concerns with the Country Manager of Google South Africa. Google South Africa remained unapologetic and quiet about the incident. This single event led to a relationship breakdown between Google South Africa and Entelligence.

http://www.entelligence.co.za/News.c...&ParentID=4269

Derrick Markotter

[Dave A]

That was my impression too reading the various stories. What I was looking at was the prospects of the claim being valid.

[derrickm]

Entelligence seem to be quite a big player - they claim that their other clients include FNB, ABSA, Investec and Vodacom. They are a Certified Google Adwords qualified company, which means they have to spend $100,000 with Google every 90 days.

I imagine that they wouldn't go after Google without a sound case, since much of their income presumably comes from managing Adwords campaigns.

I guess all we can do is wait for the ruling...

[Dave A]

They are a Certified Google Adwords qualified company, which means they have to spend $100,000 with Google every 90 days.

Which explains why TDS having a direct account and retaining Entelligence as the agent/consultant wouldn't work. In this case, money through the books matters.

Oh well - scratch that out as an option that could work for all parties.

[entelligence]

Hi Guys
Saw the discussion around our case with Google & thought I'd respond to a couple of points:

1. Google did change our CPC bid from 60 cents to R 2.00 - whether there was merit in this (there wasn't as our ave. CPC was far below our bid) or not is irrelevant. Our point of contention is that Google did this without our permission, to an account in our name.

2. Yes, filing against Google is an absolute last resort. No Google marketing agencies in SA can reliably build their business with the knowledge that Google may poach customers from their own partners. Fortunately, other agencies have begun to come forward with similar stories so we are now able to prove that this is Google SA's pattern of behaviour rather than a once off situation.

Sean

[Dave A]

Welcome Sean. And thanks for taking a moment to give your side of the story.

I don't know if you can comment on this, but let me ask anyway - something of a strategic question:

Is there any reason why Google SA would want to cut out "middlemen" such as yourselves for big corporate clients? What is the benefit to them, or in what way might you be "getting in the way?"

On the surface, you're helping build their business

[entelligence]

cutting out the middle man

Hi Dave, thanks for the interest & good question.

From where I'm sitting, I can't see why Google would do this. As you point out, agencies like ourselves have made Google stronger in the absence of a local presence & now they are competiting with their historic 'friends'.

Internationally, Google does not do this. They have publically stated in the US that they will never compete with agencies. Google SA has made noise about SA agencies being fraudulent and/or incompetent. This can't apply to all agencies & Google should definatley clamp down on the culprits or introduce more stringent measures the ensure integrity amongst their agencies.

Also, South Africa is one of the countries where Google does not share revenues with their agencies (unlike the US & UK for example), so agencies have to somehow 'work a margin' into the deal & this leads to a breakdown in transparency.

Google SA has said they are after 40 named customers. Agencies have asked for the list so we can save ourselves the time & effort from competing directly with Google, but they have not divulged the list.

I wrote an article here on why we do need agencies, but I admit - I'm not necessarily objective!

[Dave A]

Well here's all I could think of for what it's worth.

Google SA must surely have to justify a physical presence by Google in SA.
Accordingly there will be performance expectations by Google Inc.
Reason suggests that the measure of success should be on new business. (Does changing the conduit of existing business really achieve that much?)

However, managers in big corporates seeking to make a goal can do the wierdest things at times - not always in the best interests of the company as a whole.

...agencies have to somehow 'work a margin' into the deal & this leads to a breakdown in transparency.

Hmm - which might be picked on as a potentially harmful practice without the right sort of disclosure.

Not an enviable position to be in.

[derrickm]

Seems to me that having Google run your Adwords campaign is rather like putting the fox in charge of the hen-house...