Google, which apparently is going to sell AdWords in China through a distributor system, is catching flack from those distributors, who believe their 20% comission is too low.
For just under half of Google's ad sales, this is a non-issue, as Google is also playing the role of ad sales provider. In the Google Network, where Google AdSense is provided, Google is pulling a commission off sales that it provides for all partner websites. In that case, Google's provided 20% to the Chinese distributors could be construed as just under half of Google's own commission, even though Google does not provide numbers as to how much of commission it takes.
For text ads on Google's search sites, such an arguement doesn't work, not without some creative accounting. Conceivably, Google AdWords could be seen as billing Google Search for its services, then remitting a portion of those profits to the distributors. A little odd, but I've been with organizations that do exactly that.
I believe the reason for the distributor structure is because Google is going with strict monthly pricing for ad sales in China, rather than pay-per-click. Google China calls it pay-for-performance, of P4P.AdWords is Google's branded pay-for-performance (P4P) advertising service that places relevant text-based ads both within Google and on external websites. Google's AdWords services cost between RMB 600 (USD 73.98) and RMB 3,000 (USD 369.91) per month for Chinese advertising clients, depending on traffic level.
Nathan Weinberg writes the popular InsideGoogle blog.
Googles Chinese Distributors Unhappy With Their Cut
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