Ad Agencies Partnering with Search Marketing Firms (or Not)

At the recent Search Engine Strategies Conference in New York, agency executives spoke candidly about their experiences working with search engine marketing (SEM) firms. What’s working? What’s not? And most importantly, how can agencies and search marketers work together to better serve clients?

Here’s a re-cap of “Outsourcing Anonymous: Why To Admit You Hired An SEM Firm (Or Not),” one of the many interesting and compelling sessions that went down at SES:

Agency Transparency

Sara Holoubek, a free-agent consultant, moderated the session. She asked the agency panelists to comment on the issue of transparency. Should clients be told that their Agency of Record is sub-contracting to a search expert? Should the search marketing firm have direct access to the client? Or should the agency keep the relationship under wraps and “white label” the search services as their own?

Amy Auerbach, former VP Group Director, Media Contacts feels that in general ad agencies and media buying companies just don’t have the search marketing skills and competencies required—particularly in the area of search engine optimization (SEO)—so she believes that partnering with search experts is absolutely necessary. But, according to Auerbach, the bigger question is, will the ad agency bring the SEM firm into the project at the appropriate time. She admits that there is risk associated with partnerships and when push comes to shove… many agencies tend to be conservative and keep tight control over the client relationship.

The challenge, according to Dori Stowe, former president of Tribal DDB Health, is that to be successful, the search marketing expert must be fully integrated into the project very early on. She believes that this requires transparency. Dori thinks it’s important to have a full disclosure policy and to be able to honestly say to your client, “Let me get my search expert on the phone.”

Aaron Geh, vice president of marketing and sales at The Karcher Group, finds that search marketers can better manage client expectations if they are able to explain search marketing projects and results to clients directly. This requires transparency and direct access.

All the panelists agree that regardless of the degree of transparency, it is critically important to set clear rules of engagement early—before the project is even launched, if possible.

Creative Disagreements

Another common point of contention involves the creative elements of an online marketing project. Ad agencies tend to be very focused on creative that WOWs the client. Often times this means creating websites that are heavy on flash (in fact, maybe all flash) and lean on content.

Search experts find this type of website very limiting. Especially if the site has already been created, finalized and approved by the client before the search expert is brought in.

Geh mentioned a situation like this where search engine optimization was virtually impossible based on the site design… and they ended up walking away from the project.

Cultural Differences

Holoubek asked the agency execs to comment on cultural differences they have experienced when working with SEM firms.

Aimee Reker, SVP global director of digital strategy & search at McCann Worldgroup mentioned significant differences in the areas of strategic planning and client exclusivity. Reker explained that most SEMs don’t have an appreciation for the rigorous and lengthy strategic planning and budgeting process an agency goes through with their clients. Many search marketers just expect to start work immediately without being integrated into this process.

Another big difference is working with competitors. In general, ad agencies guarantee their clients exclusivity and will not work with competitors in the same business sector—especially for large accounts. In contrast, most SEMs will, and do, work for competitors. Reker believes that this is primarily due to differences in the negotiation pricing model used by agencies and the competitive auction model used by search advertisers.

Is Search Lucrative for Ad Agencies?

A few panelists expressed concern that it is difficult for a traditional agency to profit from bringing in a SEM sub-contractor. More than one agency rep said that they had delivered search marketing services to their clients without adding any additional agency mark-up.

But most panelists believe that, if priced appropriately, there is plenty of room for both the SEM and the ad agency to profit.

They all warned that the desire to mark-up services should not be the primary reason for a “white label” approach. Delivering the best results, not pricing concerns, should dictate how agencies work together.

The “Coop-etition” Challenge

At this point, apparently there are no clear rules. Questions abound, mostly around issues of trust and control. In many cases this appears to be the classic “coop-etition” situation.

Geh summarized the realities nicely when he said, “It often feels like search marketers are educating traditional firms at their own expense. Sure you gain a contract in the short term, but are you training a future competitor in the long run?”

All the experts agree, there are ways to create a win-win-win situation; a situation that benefits the client, the agency, and the SEM firm. This works best when all marketers involved realize that they each bring different skills to the table, find synergistic ways to work together, and check their egos at the door.

Patricia Hursh is president and founder of SmartSearch Marketing, a Boulder, Colorado-based search engine marketing agency. You can reach Patricia at [email protected].