Remember back when we reported that The Exchange Rate Google Uses for International AdWords Advertisers Unfair? Then we followed up that report showing that Google Won't Budge on Exchange Rate issue;
You won't be able to know how your rates are figured out. For a large advertiser, with a big budget, that can hurt.
When Danny had A Conversation With Google CEO Eric Schmidt on August 9th at SES, Danny put Mr. Schmidt on the spot about this. Of course, Mr. Schmidt really didn't know what Danny was exactly referring to.
Q: Danny cites a forum thing where Google would not detail the information of the exchange rate used for AdWords.
A: Eric said he is sure they can address that specific case (good news for those advertisers).
So guess what? On August 11th, AdWordsAdvisor2 comes back to the thread to post an update with more transparency into the exchange rate. Here it is:
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.
So there you have it. CEO's of big companies can really make a difference.
Forum discussion at WebmasterWorld.