
Global Clients & Dollar Advertising Budgets
Many of us are onlookers as the US Dollar is steadily decreasing in value. Even though many who read this blog reside in countries that have a primary currency other than the US dollar many of our readers have global clients that do allocate budgets in dollar.
With the fluctuation between currencies on the outside it looks simple. You get a budget in Dollar, you agree on an exchange rate & you bill the client that amount. Seems simple, but it’s not.
4 years ago the fluctuations started to cause concerns for us in Tokyo. The yen has steadily grown stronger & stronger in value. Using an example of how the fluctuation works we’ll look at a client that sets budgets quarterly & likes to pay quarterly also.
Let’s say that client allocates a $500,000 budget to us in May 2007 that comes to 58.8 million yen media buying power. In June the exchange rate makes that 61 Million yen buying power. The problem is by the time the client pays in August, $500,000 becomes 57.9 million yen almost one million yen less than we began.
Other than budgets there are issues concerning at performance when the client’s KPIs are set in dollar. That campaign that you finally got the CPA to be aligned to your client’s goals just increased the CPA because of the fluctuations.
What solutions can we take to resolve issues & retain transparency amongst our clients?
Here are a few solutions that work for me.
Multicurrency reporting: Give clients reports in 2 currencies. Dollar & the local buying currency. This is great for those quarter reviews when you look & see your CPA in yen has decreased a lot compared to the previous quarter even if the decrease looked minor in dollars.
3rd Party Tracking Tools: Tools like Zap Search, & Marin keep accurate daily exchange rates. I’m a big advocate of using tools like Marin or Zap search for conversion tracking & reporting. You & your clients can see historic data that the currency can be changed on the fly.
Clients Pay in Advance: Make your clients pay the monthly budget or quarterly budget in advance to avoid confusion.
So there we have it. If you have any other solutions feel free to comment.
BTW one of the solutions is a joke :-p















