As the first slide says – Google Requires AdWords re-sellers to divulge actual AdWords cost information. Not just the price you paid the re-seller, but the “Actual AdWords Cost”.
From the “Google Third-Party Policy”:
“Third parties should at minimum provide advertisers with monthly data on AdWords costs, clicks, and impressions at the account level”
The reports from Dex, Reach Local, and Hibu all show you the PRICE you paid for the click. Cost + Markup = Price. The problem with this is that since they fail to tell you the actual cost – they can set the price at anything they want. That click that was $10 from your re-seller might only have been a $5 click from Google! Google knows that this is a problem in the industry, which is why they set these policies back in 2011.
Some people have said “but Chad, is says they “should” provide….AdWords cost. Doesn’t that indicate that it is optional for re-sellers to divulge this information?” The answer is NO. I can see how some people would get hung up on the terminology, but if you read it again it says that “should at minimum provide…..cost, click, and impressions” There should be a comma before and after “at minimum” to make the distinction more clear. If you read further into Google’s requirements, it becomes more clear that this is a requirement, not a suggestion.
Why does Google not enforce this policy?
I have never heard of a large AdWords re-seller getting audited for compliance to these requirements. I’m pretty sure that if Google Audited Dex Media – this would create a firestorm on social media, blogs, and forums. All the little guys (like myself) would rejoice as finally the playing field might get leveled a little bit. Right now, Google appears to turn a blind eye to the biggest of the re-sellers when it comes to the requirement to share “Actual AdWords Cost. Google also appears to turn a blind eye to other rules for the big re-sellers (see blog post: “Big AdWords re-sellers set their own rules”).
In the “Google Third-Party Policy – Frequently Asked Questions” – under question 14 which asks “How will Google monitor compliance with these policies?” Google’s answer is “We’ll audit for compliance based on advertiser complaints.”
If no one knows that these companies are violating the policy – how do they know to complain? If no one complains, why would Google go in and audit (and potentially piss of) their largest re-sellers. Shame on Google for setting up a policy that it appears they had no intention to enforce (at least with the big guys).
In Google’s defense – they also require these re-sellers to post the Google Advertiser Guide in an easy to access place for the end users – but once again – who’s enforcing it? If you (the end user) doesn’t know that Dex, Reach Local, or Hibu are supposed to disclose the Advertiser Guide AND the ACTUAL CLICK COST – and the re-seller doesn’t tell you about these policies, how are you to know? And if you don’t know you are getting screwed, you don’t know you can file a complaint with Google.
Wouldn’t it be great if Google posted the number of complaints against re-sellers?
Pay Per Click Scam?
To me – this is where AdWords re-sellers like Dex, Reach Local, and Hibu walk the fine line of “scamming” people out of their money. It is written in the rules that they are required to divulge the actual click cost (not the price they charge) to you OR make that information easy to access – but they don’t do it. Why would they hide this information from you when they are REQUIRED to share it? For that matter, why would Google require them to share the information?
The answer is simple – the under funded, poorly ran campaigns combined with high markups that these companies run for you will eventually lead you to believe that “Google AdWords does not work.” Google can’t have you thinking that.
Knowledge is Power – Especially with Adwords!
Let’s say you paid Dex Media (I love picking on them because they are the worst in my opinion) $600 per month for a “bucket of clicks”. Dex is rumored to charge a 50% markup, so you really just gave Dex $600 to get you $300 worth of clicks from Google. At the end of the month, you get a report that says you got 50 “actions” on your ad’s. For the sake of this argument – let’s pretend all these actions were “clicks”. “GREAT” you think – “I only paid $6 per click”.
STOP RIGHT THERE! Don’t forget that you actually gave DEX $600…so really you paid $12 per click. Suddenly your R.O.I. doesn’t look as sweet does it?
Now for a minute – let’s pretend that you knew that your DEX clicks from the ads had a 90% bounce rate (Bounce Rate is a stat that DEX, Hibu, and Reach Local all hide from their customers). What would that tell you? Well, since bounce rate is the percentage of people that left your website without clicking another page (or “bounced), that could indicate a couple things.
- These people were existing customers who just Googled your business name and clicked on your ad, saw your phone number, and called you.
- If you pay for a DEX ad, they will send the clicks to their landing page (not your website) – which has a phone number prominently displayed. This number is the tracking number they assigned you. ALL CALLS to this number will get reported to you in your monthly report. With Dex’s programs there is no way to distinguish existing customer calls (and clicks) from new customer calls (or clicks).
- I do NOT support the idea of bidding on your own business name. If you did everything else right with your website, you should literally OWN the first page of Google when someone types in your business name. If you haven’t even done the basics needed to own the first page of Google when someone types in your business name, then why the hell are you wasting money on paid ads? You should be focusing on getting your website in order first. This would be like paying for a new roof on your house, when you still don’t have the foundation or the walls finished.
- The person that clicked your ad did not find what they were looking for right away – so they “bounced” off your page.
- There are many studies that show that you have to provide website visitors what they are looking for within 3 seconds of them landing on your page. If you don’t, they will hit the “back” button and go to the next website.
Google uses Bounce Rate in an attempt to determine how relevant your ad was to the consumer.
Neither of these is good for you, because it means that you just paid for a click that you had no chance of acquiring a customer from. Not to mention – Google uses bounce rate in an attempt to determine how relevant your ad was to the consumer. Irrelevant ad’s = lower quality score which equals a higher cost per click to you… ALL of these things waste your money.
Back to the original point of this “knowledge is power” section. If you knew that 90% (this is probably very close to the actual percentage) of your clicks were bouncing off your “landing page” – would you continue to pay DEX $600 for that “bucket of clicks” – NO WAY IN HELL! In my opinion – this is the main reason they hide such a valuable stat from you. If 90% of your 50 clicks left the site (profile page Dex provides) – that means of the 50 clicks you received, 45 of them were either existing customers or just didn’t like what they saw. This means that you really paid about $120 per click for those 5 clicks that might actually be relevant, new customers!
No one in their right mind would pay this kind of money for such horrible leads.