The Rise of Search Engine Marketing Agencies

By Don Lange

Direct Marketing News

Just around the Dot Com bust I wrote my first article for Direct Marketing News. It was more of a rant than an article. My topic was about how the web companies of the day were charging outrageous amounts of money to perform relatively simple tasks. There was a precedent for this behaviour. In the mid-to-late 1990’s data companies who handled simple database requests were charging scandalous fees for rolling their chairs across the room.

How could these companies get away with this? Simple, there was a mystique surrounding what they did and relatively benign projects seemed magical to companies who had no way to compare pricing. Worse than that, there was not a lot of value provided to Clients and the money that many of these companies charged were all one-shot. Charge as much as you can, rip off the client and move on to the next client.

Well guess what. Here we go again.

It Costs $1 Million Dollars to Launch a (Real) Business

Search marketing is hot right now. Everyone wants to hop on the Google bandwagon and leverage the fact that search is a measurable media. The result is that there are all sorts of boutique shops opening their doors and calling themselves experts. Or there are companies who have spent no time or money building the knowledge base suddenly offering this service because it’s sexy. The cold water slap in the face reality of most business start-up’s is that it costs a million bucks. You look at most search marketing companies out there now and when you scratch the surface you find companies that are based on tissue. Little if any infrastructure surround these companies because who really needs things like IT, Finance, HR and Scalability when you’re riding a wave and trying to make a quick buck?

What Search Marketing Companies are Charging

Several companies that we work with have shared information with me about how fees are being charged by Search Companies. And for the most part I am amazed. For those new to this, developing a search marketing campaign consists of several moving parts. Although simplified, it is basically this - after you have identified the objectives of the campaign you do keyword research, segment the research into themes, write the ads, set campaign settings, set up the conversion script so you can track conversions (of leads, KPIs or sales) and select (and often optimize) the landing pages where people go to after they click on an ad. Building a campaign should be all about objectives. So what do we see? We see charges based on the number of keywords that are being used? The more keywords that get used, the more you pay.

I don’t get it. One of the basic truths of search marketing is that some keywords just don’t convert so you get rid of them! Instead we have these fly-by-nights seemingly charging by the pound! Maybe I was trained wrong but I always thought the only way you get to keep a Client is if you perform. This is measurable media folks.

Deliverables

Assuming these companies manage to find customers who unwittingly are paying these huge upfront fees to develop campaigns, what happens after their campaigns go live? It seems like not much. Analysis after analysis that we have done on existing search campaigns has shown that the campaigns have little or no interaction with trained professionals who understand the objectives. A search campaign needs constant attention – and guess what you can see what kind of changes are happening on your Google campaigns by running a simple report that detail all changes over a specified time period. Building a well structured search campaign is not easy. However it’s even more difficult to manage that campaign over time so that it performs.

Reporting

Some companies provide sporadic if any reporting. I’ve seen reports that some shops are handing out. They are basically cut and pastes or re-treads of what the search engine itself provides. The other ruse is sexing up basic but unnecessary information such as “top 3 keywords” which in reality is just throwing a little lipstick on a pig. There’s little or no analysis, no attempt to consolidate information and certainly no attempt to justify any fees. In the direct marketing world reporting is the lifeblood of any campaign. Reports should be detailed and if applicable provide exact costs per conversion and revenue generated. They should also give a Client details on where their performance measures against a previous month, and year-to-date.

What You Should Ask if You Out-Source Your Search Marketing

It’s not all bad of course. In any new media there are always a lot of start-ups trying to leverage a trend. There are some excellent search companies in Canada and the United States. In Canada, the Interactive Advertising Bureau (IAB) has formed a Search Marketing Committee to address some of the issues the industry is facing and it is bringing together the most important search agencies and personalities.

It’s important though that companies do a little due diligence before signing any long-term contracts. Here are a few questions to ask your prospective search marketing company.

Do you have fees based on the number of keywords being used? If you do, why?
What do you do for me every month? Can you show me?
Do you have an Analyst assigned to my account or is everything being run by a bid management system?
Is your objective the same as mine – increased sales or leads and a decreasing cost per sale?
Can you integrate search with other lead generating campaigns?
Can analytics be provided?
Do you manage the money? How do the search engines bill you, by invoice or credit card?
Is your company Google Qualified? Just a note, you can be a Google Qualified Individual, however in order to be a Google Qualified Company you have to have at least 2 qualified individuals on staff as well as maintaining a minimum spend threshold.
Who are your Clients and can you provide references and case studies?

Search marketing can be your most efficient media channel. It can also be a money pit. Choose wisely.


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