Google’s recent announcement about changes to their payment methods for some advertisers has sent ripples through the digital marketing community, and we are not happy about it. While Google claims this shift offers benefits, a closer look reveals it’s primarily about reducing Google’s risk and processing fees, effectively pushing these costs onto advertisers.
What’s Happening?
Google notified certain advertisers in mid-June 2024 that they must transition from credit or debit card payments to bank-based payment options by July 31, 2024. In the email notification, Google stated that the change affects “high growth” accounts, but the exact criteria that would qualify an account as high growth remain unclear. Initially, I believed this change would only impact high-spending accounts. However, Nikki Kuhlman took to X to reveal that even lower-spending accounts were being affected, suggesting a broader reach for this policy change than initially assumed. What is clear is the consequence of non-compliance: advertisers who fail to make this transition by the deadline face potential account suspension.
Bottom line: Google’s real motives
Although this change, according to Google, is offered to create more consistency and flexibility, the reality seems far less generous. I feel that this change presents Google with an easier avenue to make more money by avoiding credit card processing fees and pushing those expenses back onto the advertiser.
With that said, Navah Hopkins did present a different perspective during a PPCChat, stating that the only upside to this change is that it will help protect brands from shady agencies who skim off the top of ad spend that they pay on behalf of the client.
However, that’s where the benefits stop.
The sentiment among affected advertisers is overwhelmingly negative, with many questioning Google’s motives, whether they will continue to advertise on that platform and the potential impact on their businesses.
A glaring issue is the rushed implementation: Google has given advertisers only about thirty days to make this significant transition. This tight timeline raises serious questions. Why the rush? There needs to be more time for businesses, especially larger ones with complex financial systems, to adjust their payment methods and internal processes. This hasty rollout adds unnecessary stress and could disrupt advertising campaigns, further fueling advertisers’ concerns about Google’s consideration of their needs in this decision.
The Actual Effect on Advertisers
I’d like to believe Google thoroughly considered the implications of this decision, but the rapid implementation timeline and the glaring, severe consequences for advertisers don’t inspire confidence.
First, as a paid ads agency owner, I heavily rely on our credit cards to manage cash flow. The loss of payment flexibility can be a big blow to cash flow, affecting small business owners the most. Moving away from credit cards—again—means giving up precious rewards and opening oneself to new processing fees.
Second, according to Jeremy Brandt, the founder of We Buy Houses, this change will make a huge and negative financial difference: “This change will cost us $250k+ per year. It does not benefit the customer in any way,” and stating that “in speaking with other business owners, I think this is going to cause a lot more negative press/blowback than may have been expected.”
For a business the size of Brandt’s, this is a significant cut into their bottom line. For smaller advertisers, the relative impacts could be much worse. The resources required to adapt to these new payment methods could also be challenging for smaller operations with limited administrative capacity.
Security Concerns
As digital marketers with our own portfolios, we must recognize that this change will increase the security risks. For example, business checking accounts in many countries (like Canada) are not safeguarded against fraud like credit cards are. This change puts businesses at even more risk if their accounts are compromised, thus, again, moving risk from Google to the advertiser.
What’s Next
It’s crucial that we, as a community of advertisers, make our voices heard. We need to unite and strongly urge Google to reconsider this change—or at least provide more flexible options that don’t unfairly burden advertisers. If this affects some accounts, it’s likely to impact all accounts.
The time to act is now.
I suggest that every concerned advertiser contact their Google reps and raise all concerns. Only through collective action can we sway their decision and create a level playing field for all ad customers, regardless of size or budget.
More than a change in their payment method, this change from Google Ads is a fundamental alteration in the risk structure of their advertising and, to some degree, the cost structure. As advertisers, we must be aware of these trends, understand the changes, and be prepared to adjust strategies in time.
