Following rumors over the past week or so that Google was shutting down its local AdWords reseller program, I’ve received two separate confirmations of this today from credible sources. Both confirmed that Google is indeed shuttering the current form of the program, which has operated for at least three years. One of the sources said that the program will cease at the end of this month (this week).
The AdWords reseller program has been used by local media companies and several independent sales channels to help sell search marketing to small businesses in the local market. Conceptually it was a win-win for Google and its local media partners; however in practice it hasn’t worked out quite as well as hoped.
When asked last week about the status of the program, a Google spokesperson said the following:
“The Google AdWords Authorized Reseller Program is still active. We remain committed to building relationships with third party partners that enable small and medium-sized businesses to realize the benefits of cost-efficient, targeted and measurable online advertising solutions like AdWords.”
These sources told me that Google has said it intends to relaunch the program later this year, though perhaps with somewhat different terms and conditions.
What this apparently means in the immediate term is loss of free API access and related account creation tools. The companies that had operated in this program will still be able to access APIs and function as “agencies” for their local advertisers they just won’t have the same “insider” status. However, again, Google apparently indicated to both of these sources that at some point in the next few months a new version of the program would be made available.
My speculation is that Google is seeking to “fix” the program and putting it on hiatus. A number of the companies using it and selling paid search to local, small businesses have suffered from heavy churn. While that’s a complicated issue that has many contributing factors, one apparent frustration on Google’s part is that some participating firms siphon off a significant chunk of the advertiser’s media spend as margin or fees, leaving less to make the actual keyword buys and delivering less real value to the advertisers accordingly.
One of the sources I spoke with also speculated that Google was now more interested in “owning the [SMB] advertiser relationship” even though he also believes that Google can’t efficiently acquire SMB advertisers in the way its local channel partners can. While all that remains to be seen, Google has made a much more direct outreach effort to local SMBs in the recent past with simplified ad units such as “enhanced listings” and “local listing ads,” the second of which is now hiatus as well.