Choosing the right SEM provider

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The trajectory of search engine marketing growth looks like that of a rocket ship: straight up. This year, the sector is worth $5.4 billion, but it will hit $7.91 billion by 2005 and $10.40 billion by 2006, according to Piper Jaffray & Co. research analyst Safa Rashtchy. ¶ Marketers are increasing their spending on search, and providers-whether they're large interactive agencies, small boutique shops or Web developers-are adjusting their services accordingly. Unlike in the past, when paid search and organic search optimization were separate entities, it seems like everyone is offering everything out there, said Geoff Ramsey, CEO of New York-based research firm eMarketer.

"It used to be that companies specialized in one or the other, but to come up high on natural search and paid search you need someone who can manage all your search marketing, since the two are really complementary," Ramsey said. "And you can't really do it alone anymore since search is getting more and more complicated."

A changing model

Billing is getting more complicated, too. Only 18 months ago, said Lisa Wehr, president-CEO of search engine marketing provider Oneupweb, paid search followed a performance-based pay scale, while search engine optimization providers charged consulting fees for their services.

Now, though many providers have stayed with these models, it's not unusual to see paid search companies charging one-time consulting fees with ongoing monthly charges or natural search firms getting paid based on performance. Occasionally, you'll even find SEM companies that are willing to provide consulting services-they teach, the clients listen and then act on their own.

"It's rare, but we've done it on occasion," said David Berkowitz, director of marketing for iCrossing. "There's no doubt there are a lot of quick fixes that can be made, but it's really more helpful to have an ongoing relationship with someone."

Either way, marketers such as Sue Bowman, manager of Web products and analytics at PeopleSoft, which contracts with iProspect for organic optimization, said the reason so many people are paying for search engine help is that it works. After all, search is still one of the most cost-effective marketing media out there, even with the rising cost of paid search, according to Piper Jaffray. Customer acquisition using search marketing costs $7 to $10 per lead, as compared with $20 to $80 for online display ads and $40 to $80 for e-mail advertising.

PeopleSoft, which started working with iProspect this past spring, set a goal of getting 48% more visitor referrals from its site. "I worked with [iProspect] when I was with another company and saw them do triple-digit increases for us," she said. "So far, they've recommended some really wonderful changes to our site that are boosting our visitors."

iProspect added subdomains so PeopleSoft can garner more than two Google positions, changed the company's meta data and tweaked keywords, which are used for both internal and external search results.

Choosing wisely

While finding an SEM provider isn't that difficult, choosing the right one often is, said Dana Todd, co-founder of interactive agency SiteLab International. "There are so many mergers and acquisitions going on," she said. "The landscape is changing so rapidly as people are gobbling other companies up and all the big [interactive] agencies are getting into it, too."

Oneupweb customer Laura Carter, director of corporate Web services for Maritz Inc., said the overabundance of providers was the reason it took her a while to choose one.

"To me, it comes down to the level of expertise and the level of customer service," she said. "If an SEM provider makes the wrong move, they can get you banned or blacklisted."

Even choosing the type of agency you want-traditional interactive versus small boutique versus large provider-can be difficult. Generally, if you go with an interactive agency, chances are it's private-labeling another firm's products and services, said Christine Churchill, president of

When it comes to larger versus smaller, it really comes down to preference, said Fredrick Marckini, CEO of iProspect. "Larger companies can devote money to R&D and tools that empower people," he said. "When you go with a smaller firm you may be able to call and talk directly to the president, who may spend more time with you. A smaller firm might make you feel good, but we think a firm with more research and tools can provide bigger results."

smaller could be cheaper

Scott Buresh, managing partner of Medium Blue Search Engine Marketing, disagrees. "Smaller providers are typically going to be cheaper," he said. "You're not paying for all their marketing and overhead. And you're probably going to get a higher level of attention and hands-on approach. If your check is a large portion of their income, they are going to be more accommodating. But smaller doesn't necessarily mean less capable. There are a lot of small providers who have great reputations."

There are a few considerations that shoppers should keep in mind, such as staff-to-client ratio, Marckini said. "There are providers out there that have 1,000 or 2,000 clients and a staff of 60 to 100 people," he said. "If you do the math, you see that the most they can devote is two hours per week to your program."

more than technology

Buresh said marketers should ask about a provider's reliance on technology. "Firms that look at search as a technical exercise are most dangerous," he said. "The ones that don't marry optimization with visitor experience are likely to do more harm than good."

And no matter what firm you end up with, Todd said it's imperative that you or your provider tracks your changes and buys. "All companies should have a decent analytics program installed," she said. "The free analytics that come with your [Web site] hosting are not going to get you the granular details you need."

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