homepage Welcome to WebmasterWorld Guest from 54.211.68.132
register, free tools, login, search, pro membership, help, library, announcements, recent posts, open posts,
Become a Pro Member
Home / Forums Index / Google / Google AdWords
Forum Library, Charter, Moderators: buckworks & eWhisper & skibum

Google AdWords Forum

    
Exchange Rates?
jimberan

5+ Year Member



 
Msg#: 3009808 posted 9:05 pm on Jul 15, 2006 (gmt 0)

Hi adwords guys, I think there are 2 of you on this forum so I hope that one of you can help me.

I have the following question and I have not been able to get a relavant answer from the adwords support staff for several months. I think the answer should be easy to find for you guys so please do help me as I dont know who to ask anymore.

Let me just describe the situation briefly so that you understand the importance of my question and the importance of a correct answer.

I currently have my account set to USD for all clicks, billing etc. As my local currency is not the USD. I am getting charged a pretty horrible exchange rate by the bank for the dollars I spend on adwords and therefor I have looking at ways to improve that situation. I have been informed by adwords support that I can change my account with some difficulties into my local currency. That would be a possibility for me to get rid of those horrible exchange rates used. However, I will need to know what exchange rate is being used by Google or its bank for their conversion.

For example. I am paying on avr 1 USD per click for a certain keyword. If you then let me change all account to my local currency then I would see the amount per click in my own currency. The exchange rate that is used for converting this dollar into my own currency is of great importance as it will show me if its in anyway beneficial to do this change in currency used for my adwords account.

What I have tried to explain to the adwords reps is that there can be big differences between exchange rates. Is the buy, mid or sell rate used for the exchange rate conversions? Is it the buy or sell rate of your local bank or the central bank etc etc. There can be upto 4% or more difference between one and the other and this makes a difference of tens of thousands of dollars for me on a yearly base.

I hope that you understand that its of critical importance that I know what type of exchange rate (i.e mid market rate central bank)is used. Your finance department should be able to answer this in a minute I assume as its information that is needed by any business that relies on forex rates. Please can you get this answer for me?

So far I have received varfious answers from the support staff including: 1) The exchange rate is determined by the click through ratio (my god, how can you give this form of irrelavant reply) 2) My bank is the one who decides (wrong as you would bill me in my currency and therefor my bank would pay you in my currency) 3) My favourite reply: Google is unable to inform you of how the exchange rate is calculated.

The answers above have taken me nearly 3 months to get. Most of the times I simply got no reply at all. Can we please now find the answer and help a good customer because I really dont see why this is taking so long. Its very frustrating. Please help me!

 

AdWordsAdvisor2

5+ Year Member



 
Msg#: 3009808 posted 11:45 pm on Jul 17, 2006 (gmt 0)

jimberan,

3) My favourite reply: Google is unable to inform you of how the exchange rate is calculated.

#3 is actually the correct answer, per our internal policies. I'm not sure that I understand why, so I've asked the product manager for that side of the AdWords system if we can't just release the public source we use to make these calculations.

AWA2

jimberan

5+ Year Member



 
Msg#: 3009808 posted 2:33 am on Jul 18, 2006 (gmt 0)

Thanks Awa2 for the reply. Please try to get all the reps to inform the clients the same way as its really been months that I have tried to get a clear reply.

Awa2, about the exchange rate used and the info not being made public. I actually think that the rate is not set by google at all however by either your merchant bank or the fed. I hope you can see that for me for example the information can either save me or cost me a lot of money and i really cont make any change till the information is obtained. It has little to do with the actual adwords product itself but its important for accounting and financial projections. I really hope that you are able to get the information "declasified" so that I can finally see if switching currency in my adwords accounts is a good or bad move. Thanks a lot for trying to help me, much appreciated!

AdWordsAdvisor2

5+ Year Member



 
Msg#: 3009808 posted 10:41 pm on Jul 19, 2006 (gmt 0)

jimberan,

It looks like #3 is still going to be the correct answer. For competitive reasons, our AdWords product team does not want to release the source of our currency conversion calculations.

AWA2

jimberan

5+ Year Member



 
Msg#: 3009808 posted 12:59 am on Jul 20, 2006 (gmt 0)

I am sorry AWA2 but this makes absolutely no sense. Normally you would charge me in USD, now you would charge me in another currency and all i need to know is if I am better of one way or the other.Google ompetive reasons has nothing to do with this whole matter in any form or shape. I am just a bit shocked and amazed that I am really receiving this answer as I cant see any logic to this. This is a matter between a company and its client and all that is requested is a breakdown of the FOREX involved.

Would it be possible to have a somewhat more detailed explanation from you in regards to this whole "competitive reasons" and exactly how this affects you so that you are unable to inform me something which is so very important to me and has little to no affect on you. This is really getting out of hand, it seems every single thing is a secret. Please help or atleast let me know how i can get in touch with someone at your financial department who I could talk to. Please AWA2, i really hope that this is a minunderstanding.

TypicalSurfer

5+ Year Member



 
Msg#: 3009808 posted 1:38 am on Jul 20, 2006 (gmt 0)

Black box currency conversion calculations. :0

At least they are consistent.

AdWordsAdvisor2

5+ Year Member



 
Msg#: 3009808 posted 8:14 am on Jul 20, 2006 (gmt 0)

jimberan,

The currency calculation itself is nothing that special, but the way the billing system works and how it is integrated with the ad delivery platform is. I understand that you're not trying to get at the latter, but the product managers are not willing to discuss the former at this time as part of protecting the whole. As one of the two AdWords posters here on WebmasterWorld, I have access to the individuals responsible for this decision, and it's going to stick.

An easy way out of this situation, for you, would be to simply open a second account in your local currency. Replicate an Ad Group from your existing account in the new account, and pause it in the USD account. Once a billing cycle or two hits, you should have a good idea whether the currency exchange will be in your favor and if your bank really is charging your an exorbitant rate.

AWA2

jimberan

5+ Year Member



 
Msg#: 3009808 posted 11:47 am on Jul 20, 2006 (gmt 0)

Dear AWA2, well that is one way to work around it. Could give it a shot. Hope i dont get booted for duplicate accounts lol. However one question though, what about the history i have build up with those keyword. I would start of at a higher cost per click as a "new" advertiser. How long will it take to catch up again to get to my old status. I hope you understand what i am trying to get at. Is it a matter of a month or 2 and does it really make a big difference between the cpc so that I can project the implication of sticking with USD or with local currency.

By the way, as soon as I would switch my bank has no involvement with the exchange rate or some big fee. What I am trying to figure out is will google do so?

AdWordsAdvisor2

5+ Year Member



 
Msg#: 3009808 posted 10:23 pm on Jul 20, 2006 (gmt 0)

jimberan,

If you would like, you can StickyMail me the two account IDs and I can link them so the history of the established account will impact the test. You really don't need to do anything extreme for the test in your currency, just enough traffic to generate a credit card charge or two so you can evaluate the end cost.

AWA2

running scared

10+ Year Member



 
Msg#: 3009808 posted 11:30 am on Jul 31, 2006 (gmt 0)

This is quite a worrying topic IMHO. The implication is that Google is effectively charging a commission to all advertisers not bidding in US$.

As an advertiser I would expect to see Google make their policy very clear (hint: post on Inside AdWords ASAP).

To some extent I am reassured to see AWA2's broad agreement that this makes sense. Also slightly reassuring in AWA's post in this thread - [webmasterworld.com...]

Google converts the bid value to the US Dollar and than determines the ad rank.

Before entering the auction, the CPC's are converted into what we call micro-currency. Basically, we calculate currency down to 6 decimal points. Highly exact exchange rates are retrieved daily.

The base currency is the US dollar, or more specifically, one hundred-thousandth of a US dollar, so even dollars are converted, really.

Because this is so granular a calculation, there is no advantage to bidding in one currency rather than another.

Hopefully the intent is good, but for the sake of good will, we need further clarification please.

running scared

10+ Year Member



 
Msg#: 3009808 posted 11:38 am on Jul 31, 2006 (gmt 0)

Unless a specific rate is required by applicable law, you understand and agree that the {credit card company} treasury system will use conversion rates based on interbank rates that it selects from customary industry sources

This is wording used in the T&Cs of one of my credit cards. It is not the most reassuring but a statement such as this would be better than the current "we're not telling" approach. So if you can't revel G, then here is a possible get out of jail free card for you. But, yes I would like to see Seth Godin's mantra of "Safe is risky; risky is safe" being applied here.

Alex_Miles

5+ Year Member



 
Msg#: 3009808 posted 12:32 pm on Jul 31, 2006 (gmt 0)

I am just a bit shocked and amazed that I am really receiving this answer as I cant see any logic to this.

Oh I can.

I was wondering about excange rates a few months back so I asked. I was told that 4p = 5c.

It didn't, of course, anywhere except in Adwords. I asked if in that case Google would mind changing some dollars for me.

I expect they are gouging on currency conversion, and this is therefore another class action waiting to happen.

At the time I recall 4p was actually closer to 7c, not 5c, but if what I were told was true (which it can't be can it?) then a lot of foreign advertisers are owed half their money back.

If I were Google, I'd feel a sudden fit of transparency coming on.

[edited by: Alex_Miles at 12:32 pm (utc) on July 31, 2006]

running scared

10+ Year Member



 
Msg#: 3009808 posted 12:42 pm on Jul 31, 2006 (gmt 0)

At the time I recall 4p was actually closer to 7c, not 5c, but if what I were told was true (which it can't be can it?) then a lot of foreign advertisers are owed half their money back.

I expect this just related to minimum bids only so, on the assumption that no gouging has been going on, then non-US advertisers would only suffer if there were no other advertisers. (To some extent this still remains the same with it possible to get US$0.01 minimum bids versus the more expensive GB£0.01 for example)

If I were Google, I'd feel a sudden fit of transparency coming on.

It's what we are asking for, whether or not we will see it or not remains to be seen. Google is not known for it's open culture.

Alex_Miles

5+ Year Member



 
Msg#: 3009808 posted 1:20 pm on Jul 31, 2006 (gmt 0)

on the assumption that no gouging has been going on

Why do you assume so easily that no gouging is going on?

[edited by: Alex_Miles at 1:21 pm (utc) on July 31, 2006]

running scared

10+ Year Member



 
Msg#: 3009808 posted 1:53 pm on Jul 31, 2006 (gmt 0)

Why do you assume so easily that no gouging is going on?

I don't, but if that assumption was correct...

AdWordsAdvisor2

5+ Year Member



 
Msg#: 3009808 posted 9:06 pm on Jul 31, 2006 (gmt 0)

AWAs post (http://www.webmasterworld.com/forum81/4597.htm) quoted by running scared is as accurate as you can get.

If you're bidding 50 ringgit for the term 'blue widgets', we will convert your 50 ringgit to US dollars using a standard exchange rate culled from a public source that is updated regularly (not updated only when it positively benefits us, but on a regular schedule that provides a fair exchange rate), and then rank your ad accordingly. When a click occurs, your actual cost per click in US dollars is converted back to ringgit using the same exchange rate and your account accrues the appropriate charge.

Simple and fair. We are not playing the FOREX.

AWA2

jimberan

5+ Year Member



 
Msg#: 3009808 posted 1:28 am on Aug 1, 2006 (gmt 0)

Dear AWA2,

I never implied that you guys did. The thing is that I can now check on different exchange rate conversion website and will find different results which can vary more then 5%. If the source where you get the rates is public, cant you share that info with us?

AdWordsAdvisor2

5+ Year Member



 
Msg#: 3009808 posted 7:42 pm on Aug 11, 2006 (gmt 0)

AWA and I followed up on this issue with the Product Manager, and I think we have made another step in the right direction. I will be quoting our Product Manager directly below:

Thank you for raising this issue, and thank you all once again for your patience.

Based on your collective feedback over the last several weeks, we would like to take this opportunity to provide greater visibility into how we manage our currency conversion process.

To convert currencies for ad ranking, we receive a daily feed from Citibank and use the average of the buy and sell prices to determine the exchange rate. This procedure was outlined accurately by AWA in a previous post:

Google converts the bid value to the US Dollar and than determines the ad rank.

Before entering the auction, the CPC's are converted into what we call micro-currency. Basically, we calculate currency down to 6 decimal points. Highly exact exchange rates are retrieved daily.

The base currency is the US dollar, or more specifically, one hundred-thousandth of a US dollar, so even dollars are converted, really.

Because this is so granular a calculation, there is no advantage to bidding in one currency rather than another.

Once an ad is served, your AdWords account is charged in the currency you selected when the account was opened, so no further conversion is necessary.

It's also important to note that we charge your credit card in the currency you've selected in your AdWords account; however, if your AdWords account's currency is different from the currency of your credit card, you may be incurring an additional currency conversion charge from the credit card company.

AWA2

migriffin

10+ Year Member



 
Msg#: 3009808 posted 8:11 pm on Aug 11, 2006 (gmt 0)

I've experienced the same problem. Even worse, they didn't charge my credit card for 3 months of advertising and charged everything this month before I ever had a chance to change the currency back to USD. I was told that if my bank was in the US, they would charge in USD on not in Euros, which is artificially costing our firm more. In essence, they are converting euros to dollars using their proprietary conversion algorithm, then converting back to euros and charging our US bank in euros. Since Google is charging a US bank in euros, we're being assessed a 3% charge on our ad spend.

Granted, all of this is unnecessary as we simply wanted to easily equate a profit margin reported in euros with our ad spend in euros. We have learned our lesson and have uploaded ads into a new campaign.

Had they charged appropriately or made it known that you shouldn't use a foreign currency unless your bank is actually in that country, this would not be an issue.

I was also told that I will lose all account history, CTR's, etc and that there was no option for fixing this. AWA2 if you can help me out here, please let me know.

running scared

10+ Year Member



 
Msg#: 3009808 posted 3:39 pm on Aug 14, 2006 (gmt 0)

Thank you AWA2 - your efforts are appreciated

AdWordsAdvisor2

5+ Year Member



 
Msg#: 3009808 posted 8:59 pm on Aug 15, 2006 (gmt 0)

migriffin,

I was told that if my bank was in the US, they would charge in USD on not in Euros, which is artificially costing our firm more.

I was also told that I will lose all account history, CTR's, etc and that there was no option for fixing this. AWA2 if you can help me out here, please let me know.

I apologize that you received this bit of incorrect information regarding the currency you would be charged in. If you specify Euros during the account creation process, then we will bill in Euros as long as your credit card will accept the charges.

I can help out with linking the two accounts so you don't lose history. Please StickyMail me the two account IDs. Linking the accounts is not as good as having all of the Ad Groups in their original locations, but you will get to take advantage of that developed history.

AWA2

Global Options:
 top home search open messages active posts  
 

Home / Forums Index / Google / Google AdWords
rss feed

All trademarks and copyrights held by respective owners. Member comments are owned by the poster.
Home ¦ Free Tools ¦ Terms of Service ¦ Privacy Policy ¦ Report Problem ¦ About ¦ Library ¦ Newsletter
WebmasterWorld is a Developer Shed Community owned by Jim Boykin.
© Webmaster World 1996-2014 all rights reserved