Arthur Freydin’s Blog

Online marketing, gadgets, business, and thoughts.

On more than one occasion, I’ve been asked to look over SEM work performed by outsourced search agencies. Typically, these are the companies that may have either had an in-house SEM expert or just went the agency route from the beginning. While I can’t say that all SEM agencies are out to rip you off, I would highly recommend that you educate yourself when it comes time to actually look at and review the results.

SEM agencies are a dime-a-dozen and come in all flavors. You get ones that want to handle every single aspect of marketing to “maximize your exposure” or there are those that feel like they have earned the right to specialize in SEM, SEO, datafeed submission, and so on. Pricing models also vary and can include revshare (CPA), ad spend percentage, flat fee, or a combination of two.

So, on to the list in no particular order:

1. Sparse Reporting. Agencies that shy away from providing detailed reporting are typically trying to hide something.     This should really be a no-brainer for the intermediate search marketer but can easily fool the novice that doesn’t know what to expect from online marketing.
2. Ad Spend & Flat Fees. I would not even think of considering hiring a search agency that cannot stand behind their work with this type of pricing model. No matter what happens to your campaign, the agency will make money every single month, especially if you just got tricked into signing away 10% or more of your ad spend. I have seen this happen plenty of times – a search agency receives a spending goal every single month and try damn hard to spend it down to the last penny. Meeting your core goals (aside from spend of course) comes second.
3. Long Response Time. The main benefit in online marketing over traditional methods is that you can flip the switch or make instant changes in real-time. If your SEM agency is consistently putting off changes to your campaign, it’s time to call it quits and jump ship. Some of the most important tweaks you do to your marketing campaign are spur-of-the-minute and reactionary to current market conditions.
   For example, if your agency put off raising bids on “blue widget” right after that widget was known to be in the hands of the Oprah selling machine (anything she touches is sold out within a day at most online retailers), you just lost all of those potential sales. Unacceptable – a properly trained SEM professional understands the up-to-the-minute shift in marketing conditions and should be ready to react.
4. Poor Performance. This isn’t as straight-forward as it sounds. Performance is not easy to gauge for someone that has no experience in managing an SEM campaign. While a 15% ad spend may sound great for someone working with a 35 point margin, an in-house professional may be able to get you 8%.
   Typically, smaller agencies may have any where from 2 to 4 account managers with maybe 20 total clients. Those 20 clients may be split across 6 or 7 different verticals. So, the account manager assigned to your account may have 9 other clients across 3 verticals that they are working with. Account managers that are spread that thin across multiple accounts may not be able to provide you with the same personal attention that an in-house SEM specialist can provide, thus neglecting key optimization techniques such as creative/landing page testing, and relevant in-depth campaign structure.

These 4 reasons are the tell-tale signs that your SEM agency may be failing you. Depending on your vertical and the agency’s keyword selection, SEM spend can escalate quite high so it is always a good idea to stay on top of what your agency is doing. Devoting some time (or someone in-house just to manage the relationship) can go a long way in making sure that the agency is staying on top of the latest trends and pro actively optimizing the account for optimal performance. Keywords should be consistently researched and added, creative should always be optimized, and new landing pages should always be tested. Staying on top of their activities will make sure that your not getting ripped off and the SEM channel is always operating at its full potential.