Google (GOOG) announced at its 2008 winter marketing forum in Beijing that it is preparing to launch an initiative to shutter all of the irregular digital advertising agents in China that resell Google's services.
With the rise of search engine advertising click fraud, the development of Google's keyword advertising business AdWords in China has been hurt. Liu Yun, vice president of Google, says that all of Google's advertising business is currently managed under a pay-per-click model in China. Therefore, any annual package or monthly package of advertising services are not allowed. Google has developed a detailed plan to eliminate irregular advertising agents across China who are selling to Chinese small businesses those services that do not match Google's model.
Liu did not provide the detailed deadline for the initiative, but he says the company has decided on a clear schedule for regular purges within the advertising sector. At the same time, the company needs to protect the interests of its customers. Because the whole process will be complicated, involving many departments such as Google's legal department and business department, the clean-up action can not be completed with an across-the-board method.
Not only does Google count a few dozen companies in China such as Chongqing Zhijia Company and Guangzhou Tiantuo Company as its own registered agents, there are hundreds more who resell Google's advertising services to customers with no formal reselling agreement in China.
In March 2007, Google targeted non-registered and fake Google advertising agents in a campaign in Nanjing. At that time, Song Zhongjie, channel supervisor of Google China, arrived in Nanjing and initiated the company's battle against fake agents. There were more than 300 Internet companies in Nanjing and local media reported that over one-half of them claimed themselves to be agents of Google, but Song said they were mostly fake agents. During that period, Google only had 22 registered advertising agents in China, but only one of them was located in Nanjing.
Often irregular agents will claim to be able to be able to place advertisements on Google's search engine, but they will instead take a client's money and not provide any services. Or they might not be duly licensed advertising businesses in China, and thus are not legally allowed to deal with advertising purchases or re-selling ads for foreign or domestic clients who want to target the Chinese Internet market.
