SEM crisis of confidence

I just read Steve Baldwin’s editorial in Search Insider: Crisis of Confidence Threatens Everyone in SEM. Steve works at Did-It, one of the early SEM agencies founded by Kevin Lee, and he’s terribly concerned about the trend of CMO’s rejecting search agencies and bringing their search marketing in-house.

“The problem that we in the SEM agency business face today: people don’t think we add value anymore; they’ve been burned too many times…”

His concerns fall into three buckets:

• There are no real barriers to entry to someone opening up shop as an SEM agency, so you get a lot of neophytes muddying the waters. He thinks the answer may be licensing or certification, although for existing agencies, I would argue that a more effective barrier is a track record with name-brand companies.

• Search is perceived as an undifferentiated commodity business.

• Search engines (i.e., Google) are indifferent to industry (SEM agency) plight.

I think these are valid concerns.

Steve ruminates about a solution of agencies insuring their clients against poor performance. I’m the first the agree that agencies should be held accountable for their performance — that’s why they call it performance marketing — but after the past week on Wall Street, I’m not so sure that “insurance” is the answer. Aside from complicating things, that won’t really address any of his three buckets of concern.

I believe the only real answer is for agencies to deeply embrace post-click marketing.

I know, we’re a post-click marketing company, so of course I’d say that. But read the latest research from Compete — how post-click marketing can have a 500% or greater impact on the outcome of online advertising. And think through the logic yourself:

• search ads are limited to 130 characters — there’s inherently a tight limit in the space an agency has to differentiate its ads — but landing experiences have no such boundaries, and they can be as creative and as differentiated as an agency can imagine;

• ads and landing experiences are part of the same flow in the mind of respondent — when they’re not part of the same flow on the planning and production side of the equation, you get continuity problems and broken expectations — and this happens all the time in search marketing today; a search agency that unifies advertising and post-click marketing can deliver tremendous value to its clients;

• excellent post-click marketing can’t be done just by anyone — it requires more strategy and creativity than buying keywords and typing in headlines — so serious search agencies can creative a substantial barrier to entry by hiring top-notch designers, copywriters, marketing strategists, and building their own advantage with post-click expertise;

• testing is important but not sufficient — agencies whose post-click services are limited to running tests of existing or cookie-cutter landing pages (which headline is best? which image is best?) aren’t delivering any differentiated value either: testing is only as good as the ideas you’re testing — the value is in the strategy and creative that’s being tested;

• if segmentation and Long Tail strategies have been one of the successes of SEM agencies on keywords, can you imagine how much low-hanging fruit awaits in segmentation and Long Tail strategies in post-click marketing — where today most landing experiences are unsegmented and unspecialized;

• search agencies are going to be measured by conversion rate and ROI — that’s the new reality, and it is good — and unless they proactively take the reigns in post-click marketing, there is simply no way that they’re going to have positive control of their own destiny and their clients’ successes; you can’t have great search marketing matched with poor post-click marketing and not have the outcome be unsatisfactory.

Steve, if you’d like to give us a call, we’d be happy to help.