Rumor Has it Local Adwords Reseller is to be Terminated

Google has been bracing itself, trying to find the best strategies for profiting for the dramatic shift of local companies coming to the Internet to find streams of customers who are no longer walking though their doors. Meanwhile, a lot of people online have been discussing the decline of Adwords, and just in the last couple weeks, it seemed that the conversation got a little louder, with talk rising about the possibility of Google cancelling their local Adwords reseller program.

On initial impression, this seems to go against the other moves we’ve seen Google make in regards to local search, but the truth of the matter is that the local Google Adwords program never really amounted to much. Still, cancel it? Seems a little drastic.

It appears the rumors are getting louder. Greg Sterling of SearchEngineland.com spoke about this in a blog post March 29th, mentioning that he had “two separate confirmations” from “credible sources” that the shut-down was going through after all and that it was due to happen by the end of “this month.” The fact that Sterling says the end of this month at the end of the month leaves a little doubt about whether this is happening at the end of March or April, but I digress.
The local reseller program was a way to make it easier for local media to sell internet marketing services to local bizzes via Adwords, setting up the potential for a relationship that would bring help local businesses, provide media incentive, and bring Google more profits. Given the rising demand for online marketing for small businesses in today’s economy, you would think it have gone over well, but instead it sort of tanked.

Not so fast though. It doesn’t look like Google has given up on the program altogether, and they claim it will be available again sometime before the year is out, but with some substantial changes. According to Sterling’s sources, the problem for Google is that the independent advertisers were taking advantage of the deal they had with Google and taking too much of a cut from their local clients, thus making the services less affordable and less effective in relation to small business budgets. In other words, the greedy marketers were diluting the effectiveness of the service, thus making it a less attractive option, which could explain why it hasn’t been more successful.

Sterling goes on to talk about how Google is leaning more towards a focus on working directly with the small businesses rather than working with the middlemen. From what I’ve seen, this does appear to be true, but at the same time, I am skeptical about whether Google would be willing to take too strong of a stance on this approach. After all, I’m a marketing guy myself and I can tell you right now that local businesses do not want to bother with a lot of even the simplest online marketing stuff.

Google can surely pick up a good chunk of bold do-it-yourselfers, but the fact of the matter is most business will likely come from marketing guys working on the behalf of SMB’s, especially as the recession pinches entrepreneurs even tighter, and the marketers, recognizing opportunity, pitch their services even more.

I really don’t see the reseller program going away for good. If there is any hope for Adwords at all, it is with local businesses. And the best way to get to those local businesses is dealing with those middle-men who speak their language. Google knows that, they just want to dig their heels in a little bit, harness a little more control over a program that is getting away from them, and re-launch it in a way that serves their better interest. And I don’t blame them.