New York—Search engine marketing agencies now direct the majority of SEM spending in the U.S., according to a report released Tuesday by JupiterResearch, a division of Jupitermedia Corp. Currently, 31% of search marketers use an agency to manage their SEM campaigns; however, those marketers account for 51% of the total spending on paid search, according to Jupiter.
The report, "Search Engine Marketing Agency Constellation," said that while there now is no standard fee structure across the sector, SEM agency fees will begin to resemble traditional ad agency fees as the industry matures. Currently, half of the search marketers that outsource SEM pay monthly or per-project flat fees. Only 12% of search marketers that outsource pay their agency a percentage of ad spending, the standard fee structure used by traditional ad agencies.
"As search marketing grows in complexity and advertisers increase their search budgets, we expect the market for SEM agencies will continue to expand," said JupiterResearch associate analyst Nate Elliott, in a statement. "With so many agencies offering search engine marketing services, it can be hard for advertisers to choose the right firm. The SEM agencies that have built their own bid management and campaign tracking tools, and that use extensive data to create campaign strategy, are typically able to generate better results for their advertisers."
The report identified five SEM agency leaders in paid listings management: Decide Interactive 24/7 Search, Did-it.com, Impaqt, Performics and Avenue A/Razorfish Search. For organic optimization, iProspect and Impaqt are sector leaders, according to Jupiter.
—Mary E. Morrison