How Do International Search Marketers Deal With Currency Fluctuations?

Author: Gab Goldenberg

It’s not secret that Canadian businesses are strongly affected by how the Canadian dollar fares against the US dollar. Search marketing businesses are like others in this respect, and here are some of the responses I got over Twitter when asking some Canadian and international friends about how they dealt with international currency fluctuations.

From @neyne Branko Rihtman, SEO Scientist & Tens Online Marketing (Israel): “All of our clients pay us in US$. Since the exchange rate is all over the place now, we just adjusted our prices a bit and we hope that the gains will balance the losses over time.”

From @Nick Wilsdon e3 Internet Marketing (Russia/Ukraine): “We charge according to the client’s preferred currency and similar to @Neyne have had to increase some of our USD charges. It’s worth noting that some industries work exclusively in USD, for example casino/online gaming.”

From @Will Critchlow, Distilled Reputation Management (UK) – “We have exposure in both directions. Exposed to the € and $. Clients pay in both of above. Considering [a US]$ bank account.”

From @Dev Basu, Dev SEO & PubliPages SEO (Canada): My current base of clients is entirely Canadian. I suspect we’d either use a fixed rate or hedge the foreign currency risk. [I assume he means carry a certain amount of both currencies.]

From Martin Perron (@mperron), Bloom Search Marketing (Canada) –
Most of the time, US clients pay in USD, and Canadian clients pay in CAD, etc. [It] Depends on how the client settles their media. However, we do expose ourselves to a currency exchange gain/loss. Rather we take the risk than expose clients to the fluctuation. Sometimes it evens out; the CAD was high most of 2008, [meaning we had an] exchange rate loss, but with current rates, [it looks like we'll have an] exchange rate gain in the books. Hope this helps!

From @Ruud Hein, Search Engine People SEO (Canada):

When I was on my own I would set my price in USD.
Most customers are in the USA. By showing my price in USD I look better priced as the CAD is usually lower in exchange rate than the USD. So my CAD $1000 might be just USD $800 …
Secondly, if there’s a rate chang, it is usually the USD getting stronger vs. the CAD. By “fixing” the price in USD I still get the same hard number ($800, for example) but when I change it at the bank I get more CAD ($1010 instead of $1000, for example).
So: charging in USD as a Canadian based company has the benefit of showing a cheaper price while offering me some rate exchange security.”

As to myself, I get paid in USD where possible. Not as an issue of policy, but because I haven’t given it much thought frankly. With the Canadian dollar dropping so rapidly recently, it could mean some extra profit :).

Tags: ,

Sidebar Story

Comments

  1. Hey Gab I have to say since Anna has taken on our finances we have got slightly better at working the currency fluctuations. For example, many of our domain suppliers are based in the US so when the $ is low is makes sense to stock up those accounts with credits. At times we've had an effective 10-15% discount doing this. Similarly for normal users, take extra years in renewal when the currency of your Registrar is low. We're also more careful now not to cash out from US suppliers when the $ is weak. It's better to wait a while for those affiliate payments. You can do the same with Adsense payments, simply defer the payment for another month cycle if the $ looks particularly bad. HTH [ed: Nick Wilsdon is a Russian SEM.]

    Comment by Nick Wilsdon - November 1, 2008 @ 1:05pm
  2. Hey Gab! great post and just in time when I have some stuff to add from my side. We're here in Vienna, with considerable costs split up in EUR (employees, office) and USD (domains, US hosting, links, etc...) We therefore switched to charging based on our own expenses... so our work is being charged in EUR and the rest in USD... However this doesn't solve the problem that clients in .CA or .AU have currently with us. Especially the AUD dropped 50% against the USD, so those clients paying us in USD now complain and tend to want compensation for their currency and buying power dropping. As you can imagine I cannot do that, and so that means loss in business from AU ultimately... Best, Christoph Ed: Chris is a Viennese SEO

    Comment by Christoph C. Cemper - November 1, 2008 @ 2:20pm
  3. @Nick - Thanks for the additional tips. I'm gonna edit the comment in a minute so you've got a dofollow link for the value add. Delaying payment and stocking up on credits certainly sounds intelligent. @ Chris - Thanks for sharing. I'll add you a dofollow as well in a moment.

    Comment by Gabriel Goldenberg - November 1, 2008 @ 7:30pm

Leave a Reply