Bigmouthmedia and the Best Practice Funding
on: September 20, 2007, 8:25 am
Release Author: bigmouthmedia
Release Summary: Bigmouthmedia comments on the Google announcement
of the end of the European Best Practice Funding
Release Body: Google has announced the end of the
European Best Practice Funding. As of January 2009
the whole BPF scheme will be removed and from January 2008 the "growth
kicker" will be removed.
Best Practice Funding was used by Google
to encourage agencies to appropriately increase their cost-per-click
spend and try out new initiatives such as Google's new Gadget
about the move, bigmouthmedia UK MD, Lyndsay Menzies
commented "We at bigmouthmedia (http://www.bigmouthmedia.com/)
had budgeted assuming the removal of BPF from early 08 so we are
pleasantly surprised to get another year of BPF, till Jan 2009.
This buffer will hopefully help those agencies reliant on BPF to
make their margins and restructure their business model to cope.
Of course, clients too will be affected to a degree. Higher management
fees will cut the ROI efficiency of campaigns meaning that agencies
will need to maximize efficiency through excellence to counteract
this; resulting in a more professional industry overall."
Lyndsay stated, "We've been anticipating this type of announcement
for some time. It makes perfect business sense that Google
would do this, now that search is so established in these
regions. For bigmouthmedia as a company, the removal
of best practice funding presents a fairer and more stable system
in the future even though it affects our service costs."
The announcement, whilst not unexpected, nevertheless could put
in some jeopardy the financial health of some agencies involved
in search, and along with them, the client campaigns. In this competitive
industry, some agencies based their business model on paying the
kicker directly to the client as an incentive. In fact, there has
been a growing trend amongst some heavy users of Google
PPC to systematically move PPC (http://www.bigmouthmedia.com/products_services/pay_per_click_management/)
work between agencies to benefit from ongoing growth kickers. These
agencies are going to feel the pinch as they are reliant on kickers
and BPF to provide their margin.
Are there going to be benefits?
Bigmouthmedia believe there will; it will encourage
billing transparency. Recently bigmouthmedia have
seen agencies hugely undercutting to win big contracts. This announcement
will put paid to that. It will also be a fairer system as it won't
penalise agencies for seasonal spend, for example, Travel and Finance
clients whose spends are very high in Jan compared with the other
11 months of the year. Then of course, it puts the focus on excellence;
client campaigns will need to be even more professionally run, and
efficient which is in everyone's interest.
Google biting the hand that feeds them?
Naturally Google has used agencies as a platform
to gain the clients they wanted, and the resulting market share.
As the market share has increased, they have wound down the agency
benefits, and bigmouthmedia expect this to continue. But this is
business, and savvy agencies will have seen the changes coming.
Bigmouthmedia USA, for example is used to operating in
a paid search environment without Best Practice Funding.
Google will still use agencies like bigmouthmedia
to take their new product opportunities to clients. They need agencies
on their side as much as the agencies need them so bigmouthmedia
expect to see Google continuing to communicate
closely as always. Next for bigmouthmedia is increased
geographic expansion, a major worldwide recruitment drive, and a
big celebration to mark the companies impending 10 year anniversary!
Founded in 1997, bigmouthmedia are leaders in search
with a team of over 200 staff across 11 offices in 8 countries on
3 continents the company maximises return and exposure for major
brands online through a variety of fully integrated digital marketing
channels: Search (PPC and SEO (http://www.bigmouthmedia.com/products_services/search_engine_optimisation/)),
Online Media Planning, Affiliate Marketing, Social Networking, Brand
Monitoring, Online PR and Web Analytics.
merged with GlobalMedia in late 2006, creating
the largest independent search marketing agency in the world. The
group services big-brand customers globally including: Adidas, Hilton,
British Airways, Tesco, Aer Lingus, BP, Barclays, Castrol, Conrad
International, Dorling Kindersley, Early Learning Centre, easyCar,
Fasthosts, FHM, Jumeirah, Kodak, Canon, Samsung, Starbucks, Top
Man, Debenhams, Which?, Lacoste, Euler Hermes and Wall Street Institute.
is a Deloitte Fast Growth winner and a 2007 FT Best Places to Work,
and is currently short listed for four National Business Awards
Details: Press Contact: BIGMOUTHMEDIA LTD UK
Tel: (+44)131 561 2179
Fax (+44)131 553 6800
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