In a recent column, I asked online advertising executives to sound off about search marketing and, boy howdy, they did. I also asked several attendees of this week’s iMedia Summit to voice their opinions on concerns facing search marketers today. From all walks of online marketing -- big online agencies to site designers and search engine optimization shops -- voices rang out about the toughest issues in search, interpreted by the smartest online marketing audience in the industry: iMedia readers.
The responses led me to believe the current state of search engine marketing (SEM) can safely be compared to a hydrogen-filled dirigible heading for port. At the moment, SEM may still be ruled by popular opinion, while the dividing lines that exist between specialized search shops, site designers and online marketers keep us from seeing the impending disaster.
SEM needn’t go Hindenburg, thanks to the expertise of smart marketers as a driving force for a sound future. It took NASA many years to determine what turned the big blimp into a fireball, and it wasn’t sabotage or a bolt of lightning. It was a small spark of static electricity. The search zeppelin definitely is filled with flammable gas, but sound advice obtained from asking some smart questions may prevent it from exploding.
Who Should Be Responsible for Search?
Answers to this question were nightmarishly predictable. Specialized search engine optimization (SEO) firms claimed to hold sway over search marketing, paid or unpaid. Agencies, the keepers of client relationships, almost always said they should be in control. For the most part, site design firms appeared indifferent to the needs of search marketing. However, someone outside the agency/SEO realm can offer a very different perspective. In the end, we learn a great lesson from a guy with the bird’s eye view to watch it all go down:
“It depends on the advertiser. In one extreme, large Fortune 500 advertisers usually have an agency,” says Dave Carlson, CEO, GoToast. “Often the best way for these firms to approach search is to contact their agencies. At that point, [paid] search becomes an apportioned part of an overall strategy. In the other extreme, very small businesses typically do not have the agency relationships or budgets to pay others to manage their search campaigns.
“Specialized search engine optimization (SEO) firms play an important role because natural or editorial results represent a large portion of click traffic. Nearly every site needs to optimize or at least be search-engine friendly. SEO providers have stepped into the paid search fray and often apply an SEO frame of mind (focusing on accountability) to paid search. SEO providers have been forced into this frame of mind in order to justify the sometimes high costs of optimizing a site.
“The medium-sized businesses, 20 to 30 employees, are often the smartest advertisers in search because they typically have the passion and scaled business model to manage SEM in-house, minus the various quagmires big advertisers face and the lack of resource problems of very small advertisers.”
How Efficient is Search?
Hunger is an interesting feeling. Sometimes you feel like a nut and sometimes you don’t. Sometimes you need a pastry, and nothing else will do. A search result for the keyword hotel is pretty predictable in that, chances are, you will at least get something travel-related.
However, try to find a tart when you really want one and the dividing line between sponsored listings and organic results along with a search engine’s natural inability to communicate with the human interface becomes painfully apparent. The phrase “I need a tart,” returned the “blank stare” search results from eBay suggesting I go bid on tarts there along with organic links I simply cannot discuss here. Clearly, I needed a second opinion, so I got one from James Colborn, Account Director, Inceptor, Inc.
“ Search can be effective. But it’s also very cluttered and still holds many opportunities for both the honest optimizer and the ‘dishonest’ optimizer,” Colborn says. “Search lacks standards and has too many different rules set by the engines and not a governing body. Until search is managed as a unit rather than as different entities, it will be rife with inefficiency.
“At the moment it CAN be efficient but the company using it, either agency or direct vendor, must be sure that they aren’t crossing their wires. A lot of companies are bidding against each other in search if they don’t manage their search program with the affiliate program. This increases the click costs and reduces their return. Companies that don’t keep a check of resellers of their products or services face a similar scenario.
“ It is hard work but rewarding if done correctly. The biggest winners with inefficiency are the engines. In the two examples above, any paid for listing engine will be making more and more from each click and therefore gives you an understanding why engines are not pushing for standardization or a ruling body to prevent instances such as this.
Paid Search is “Paying” Everyone
According to many SEO firms, paid search delivers an unfair prejudice. A search result should be unbiased source information. One site (selling an optimization guide) offers the wildly inappropriate and non-sourced claim that 85 percent of users ignore paid listings. However, no one can deny what paid search has done for online marketing. Somebody must be clicking on those paid results. My theory of all search listings being paid is once again vindicated, along with great suggestion for the future.
“’Natural’ search is about as natural as the models found on the pages of Playboy nowadays. While paid search has helped to recharge our industry, it has also served to compromise the integrity of what search was intended for,” says James Kiernan, Associate Media Director, FooteCone and Belding Interactive. “I wouldn't necessarily go as far as to remove organic links altogether, but I do think it makes sense to partition paid search vs. ‘natural’ search so that it’s blaringly obvious to the Joe average user. Perhaps search engines create something similar to white pages vs. ad-driven yellow pages?”
How About a Search Incentive for Buyers?
If interactive were tough to integrate, search would seem to be impossible. To top it off, there is no incentive for agencies to do so. Why don’t paid search providers offer better incentives for agencies to get involved in search? The agency response tells us this problem is not an easy one to solve, unless of course we want to toss the infant out with the Jacuzzi water.
“ It is difficult to implement an institutional ‘discount’ on certain paid search programs due to the nature of bidding systems,” says Jason Burnham, President and Media Director, Mass Transit Interactive. “However, as an agency, I would like to see a discount incorporated. As with affiliate programs, it is important for the agency to articulate to the client the level of work that goes into managing a successful search program. Retainers, rather than commission, are a much more pertinent pricing model for agencies. Unfortunately, if there are ‘volume’ discounts, you may find less sophisticated advertisers attempting to drive down the price through purchasing larger volumes of less relevant keyword search inventory. Therefore, volume-based purchases of less relevant search results would diminish the user experience.”
What’s Wrong with Contextual Search?
Contextual search is getting some really bad press. Some marketers think contextual inventory should be discounted because it does not perform as well as the “tried and true” paid search listing. Some think the entire process of placing paid links into allegedly contextually relevant locations such as email and destination sites are effective only for very specific verticals. At least one smart marketer offered this very pragmatic assessment of the situation.
“Problem: Contextual relevance is less effective than self-directed search returns,” says Mark Redetzke, Vice President, Online Media, Zentropy Partners. “The industry sees this very clearly. If we are complaining about the rising costs of search, as we knew it a year ago, then we are now able to complain about the reduced effectiveness based on the listings showing up another step or two from the point of decision-making. Nothing is being done to fix it because publishers now have additional revenue streams (which they like), PPC engines have another revenue stream (which they like) and advertisers have a choice whether or not they want to use contextual search and we like having that choice. There’s nothing wrong with the picture, in my opinion.”
What’s Going on with Channel Conflicts and Trademarks?
The latest hot topic in search is channel conflicts. My Google search for “Ford F-150” last week gave me at least 12 possible points of sale, including two paid “official” sites. Which one should consumers trust? How can a dozen advertisers claim to be the Ford website? I have to admit, when I asked this question I expected every response to point the finger at paid search providers. The consensus seemed to be that responsibility for the brand lies with the brand.
An advertiser simply can’t blame Google for a channel conflict, particularly with its staunch commitment to helping advertisers while maintaining the user experience. In the end, managing brand presence efficiency in any medium is a complex and difficult process, which requires the stewardship of agency, brand, and media vendor. Of course, differing opinions make the world go ‘round.
“What's needed is an authority on policing relevance. Google has been altering its rules with Google's objectives in mind, relying exclusively on technology instead of working more closely with reputable search engine marketers,” says Jeff Herzog, CEO, iCrossing. “Look at what happened in France -- Louis Vuitton recently sued Google and won. At some point, it is up to the brands in search, just as it is in any other media. Until the people behind the Brands understand, search will resemble a similar bubble to what banners, etc., represented in 1999-- a very vulnerable place to be. Unfortunately, consumers and advertisers, especially when dealing with automobiles, should go by the old adage, ‘let the buyer beware.’”
The End of the Beginning
Throughout the course of my research, I discovered two things. One: With very few exceptions (no names) the world of search would appear to be in some pretty capable hands and is at least beginning to show signs of post-pubescent behavior. Two: It doesn’t take a NASA scientist to determine that with a couple of preemptive smart moves we can keep search marketing flying for a long time.
I’d like to extend my sincerest appreciation to all who took the time to respond to my request for their perspectives. While I am at it, I’d like to say thanks (I think) to all of you who are now referring to me as the Lewis Black of search marketing.
About the author: iMedia search columnist Kevin Ryan’s current and former client roster reads like a “who’s who” in big brands; Rolex Watch, USA, State Farm Insurance, Farmers Insurance, Minolta Corporation, Samsung Electronics America, Toyota Motor Sales, USA, Panasonic Services, and the Hilton Hotels brands, to name a few. He is currently Director Market Development of IPG’s Wahlstrom Interactive where he provides guidance in directional online marketing to Wahlstrom’s prestigious list of clients and sister agency brands.
Possibly the perfect medium for driving traffic into fast food restaurants, the mobile phone brings, well, mobility, but also time and location targeting and high access to the youth demographic. It is no surprise that Burger King and McDonald's have pioneered a number of mobile marketing programs.
McDonald's mobile offers
McDonald's rolled out a direct response marketing campaign aimed at driving localized retail traffic during the traditionally slower late evenings with a series of weekly mobile coupons for late-night offers. Consumers could sign up for mobile coupons on the company's Late Nite Lounge website. The campaign was also supported by mobile advertising banners running across several popular mobile internet sites, where consumers are targeted by age and location and time of browsing.
Click rates for the campaign -- launched exclusively in the New York metro area -- were more than double the industry average. The program received hundreds of opt-ins during the first week, and opt-in growth continued throughout the length of the program.
Mobile coupon and voucher programs can connect directly to the majority of retailers who measure marketing success in store visits and phone calls rather than internet clicks. Receiving a coupon on your phone is a time saver, and convenient compared to getting the scissors out with the Sunday paper.
Again, the medium reinforces the brand message: quick and convenient.
"American Idol" taught Americans how to text message. Now it seems that every reality show has a mobile voting mechanic as a means to reach beyond the screen and engage with viewers. Networks are also using mobile to drive "tune in" first by enticing viewers to interact, and then by reminding them to watch.
A&E's bountiful campaign
A&E tapped into the power of mobile to promote one of its most popular shows, "Dog the Bounty Hunter," and found that mobile programs drive short and long-term viewership, network loyalty and word-of-mouth exposure. "Dog the Bounty Hunter" is a series about the adventures of real-life bounty hunter, Duane "Dog" Chapman. Chapman is famous for bringing more than 6,000 fugitives to justice and also for his unique sayings, or "Dogisms." For example, according to Dog, "To be a winner, you have to know what losing feels like."
Viewers of "Dog the Bounty Hunter" were able sign up to receive weekly messages from Dog on their mobile phones and also send in their own shout outs or "Dogisms" by texting into a short code. Consumers benefited because they got time-targeted reminders that their show was about to begin. This is a great example of conveying your brand as a service.
Qualitative research conducted during the mobile campaign revealed that mobile marketing not only drove "tune in" for television programs but also increased brand perception of both the show and the network.
- 62 percent of participants said they are watching "Dog" more as a result of the text message campaign
- 65 percent said they would watch more "Dog" in the future due to the text message campaign
- 66 percent said they would watch A&E more in the future due to the text program
- 93 percent will recommend the network to their friends
When it comes to the hotel industry, a little loyalty and a lot of convenience go a long way. Progressive hotel groups are building mobile programs that extend the power of the internet to the customer's pocket. It's easier for the mobile consumer to manage the craziness that often surrounds a travel experience. Indeed, hotels and mobile phones share the same core audience-- the mobile consumer.
Imagine on the day of your reservation receiving a confirmation text message from your hotel providing you with the hotel's address and local phone number and a link to the hotel's mobile internet site where you might find directions, hours and an outline of the hotel's amenities. After your stay, you might even have the option to earn extra loyalty points by responding to a text message survey asking you to rate your stay.
Such a program fosters loyalty and also preempts calls into customer care centers by providing the traveler with the information he needs when he needs it. And the consumer views it as a unique value-added service from the brand.
European and Asian financial institutions are using mobile to send account balance and other alerts as a value-added service.
A leading retail bank recently charged a friend of mine $40 for two overdrawn checks (she didn't know that her husband had written a large check for a vacation rental). She was livid that her bank would stick it to her for this first time transgression after 10 years of loyal business. She asked me for banks that offer text alerts, and is seriously considering switching brands. Rather than charge consumers for such a service, savvy marketers are realizing that this is a perfect opportunity to convey their brand as a service and make their customers' lives better.
Alert services typically are configured and managed on a website and, like packaged goods, often include room for the brand to upsell services like auto loans.
When I first sat down to write this piece, I began formulating my own ideas on the dilemma at hand. Then it occurred to me: Maybe the reason agency-brand negotiations are such a cumbersome process is due, in part, to the fact that most people in the industry are familiar with only one side of the story.
And so, in the spirit of social media and the wealth of networks, I decided to write this piece with a little help from my friends (i.e., you).
I started by creating a form in Google Spreadsheets. (For those of you who are not familiar with this tool, it is really simple and free. Go ahead, give it a try). The form I created asked the following questions:
- Are you from a brand or an agency?
- Have you ever been taken advantage of in an agency-brand relationship?
- Do you believe in pay for performance?
- Have you ever fired a partner?
- What do you hate most about contract negotiations?
- Now it is your turn. How do you avoid getting ripped off in negotiations?
You can view the form here. (The survey is still live, if you would like to rant. I may not do anything with your rant, but feel free to use it as a cathartic tool. After all, your husband, wife, or mother is sick of listening to you complain.)
As a final question on the form, I asked respondents whether I could use their real names. Six out of 17 respondents agreed to be quoted. (For those who submitted quotes that do not appear here, my apologies -- I really do appreciate your help.)
In order to drive traffic to the form I wrote about it on my blog and tweeted about it. (Thanks to those who retweeted it; shame on those who did not).
Before we get into specific ways that brand and agency executives can improve the negotiation process, I want to frame the conversation by illuminating the obvious: Most of us simply hate the process -- so much so that we want to stick toothpicks in our eyes! Check out these responses with regard to the most-hated element of contract negotiations:
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As you can see, 59 percent of respondents simply hate the entire process, while 29 percent (all of whom are on the agency side, by the way) hate the "hurry up and wait" game the most.
Admittedly, my process for attaining these data is less than scientific (OK, much less), but my guess is that a more robust poll would yield similar results. (And I am a pretty good guesser.) So let these percentages be a reminder as we work through the rest of the findings.
Who is ripping off whom?
In gauging people's disillusionment with the whole agency RFP process, it is interesting to see which party feels it is ripped off more often.
Having worked in this industry for many years, it came as no surprise to me that more agency employees feel they have been ripped off. In light of the fact that many agencies feel they are getting ripped off, you might think that they would be more comfortable with the pay-for-performance model -- a model under which they could get paid exactly what they deserve.
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Although some agency folks say they like the pay-for-performance model, perhaps the split in responses represents the fact that it can be difficult to structure such a deal -- especially when you are not dealing with direct response marketing.
For those of you who hate numbers, take a deep breath -- we are done with that portion of this article. (Although if you are in this industry and hate data, maybe you should continue to hold your breath.) Instead, let's hear directly from some of the survey respondents with regard to their advice when it comes to how agencies and brands can avoid emerging from the negotiation process feeling cheated.
Let's start off with industry veteran John Durham of Catalyst:SF. His agency recently won a very big account, so I would give his insights a good deal of weight. "You always try to be fair on both sides," Durham says. "Each has to win. If you understand pain points and necessary points on both sides, you will get most of what you want."
Indeed, compromise and understanding on both sides are key to the negotiation process. As my former boss and mentor, Shenan Reed of Morpheus Media, puts it, "At the end of the day, every company wants to stay in business, pay its bills, keep the lights on, and maybe turn a profit. I firmly believe that you catch more flies with honey than you do with vinegar." (And I can tell you that there are a lot of flies being caught at Morpheus these days.)
However, based on the data we saw earlier, it's obvious that the negotiation process is anything but a love fest. Despite the above comments, there is a great deal of contention that takes places between brands and their agencies. For example, many agency-side marketers feel that their organizations have rights beyond what they may currently be given.
Elizabeth Bleser, managing director at Incognito Digital, says agency executives have a right to put a monetary value on their intellectual capital. "There are so many situations where we expose our thinking to win an engagement, or sell through a concept that we are not compensated for," she says. "As an agency, we embrace the 'thinking' process, but if a client, time and time again, does not follow through on the request or provide actionable feedback, a costly loop is created."
As media planning is increasingly viewed by clients as a commodity, it is the art of marketing (i.e., the thinking done by an agency) rather than the science that will keep agencies successful and profitable, Bleser adds. "I believe charging for scoping or discovery is something that should be a recognized industry standard," she says.
Finally, one respondent, who wished to remain anonymous, provided a somewhat grim view of the state of client-agency negotiations. "Frankly there's not a lot you can do other than be clear about expectations and responsibilities," the agency representative writes. "Someday, clients are going to begin realizing that all the efforts we put into CYA and protecting ourselves are actually getting in the way of us doing what we're supposed to do -- help them communicate with their stakeholders and audiences.
"Maybe clients will begin to see that they're paying a price in the marketplace for the unethical behavior of other marketers -- in the form of pricing based on marked-up costs instead of value, CYA busy work, reduced respect, and other games we have to play," the person adds. "If they see that, maybe they'll be more likely to take a stand. Otherwise, it's going to stay a cost of business for everyone involved."
You are probably thinking, "Adam, we know agencies complain a lot. Can we please hear from the brand side of the fence?" Sure you can.
Melissa Hudson, director of digital media at A&E, says that the key to not getting ripped off in agency-brand negotiations is to do your homework. "If there is a fee or cost that I am not familiar with, I look up rate cards, or find out more," she says. If the RFP went to multiple agencies, Hudson says she may even request that others include the line item in their proposals so she can gauge their responses and see that they would charge for it.
Furthermore, Hudson says she always challenges a fee or cost that she feels is even the slightest bit too high. "Sometimes agencies will come back with a good argument, and the fee or cost stays the same," she says. "I always ask the agencies to provide less-expensive alternatives in their proposals. Even if I provide them with a budget up front, I want to know what the 'cheaper' version of the product will be." Also, Hudson adds, if she knows what she should be paying for a given service or product, she will make it clear as to how much she is willing to spend for each part of the project.
Another common complaint arising from the brand side is that an agency's pitch team and its subsequent account team are often not comprised of the same players. Larger agencies tend to have a team focused on new business, and that team is generally comprised smooth-talking thought leaders (or, at least. it should be). Once a contract is signed, the old bait and switch occurs. So, to all the brand managers out there: It may be a good idea to ensure that the agency roster servicing your business is set in stone, with as much detail as possible.
For many professionals working in the new media landscape, forging lucrative relationships is not defined only by capital gain. Some of us are fighting the good fight for the creative use of new media (which is not an easy fight at all). C.C. Chapman, partner at new media marketing agency The Advanced Guard, says that his firm likes to evaluate how potential clients are participating in online conversations in order to gauge their tolerance for experimentation and new ways of thinking.
"We pride ourselves on coming up with creative new ways to use media, but I get tired of pitching ideas that don't come to fruition," Chapman says. "Anyone can come up with ideas and share them, but I want to make sure we are working with a team that is ready to execute. This is very important to us in the negotiation process."
Well, there you have it, folks: interesting insights and tips on the brand-agency negotiation process from people within the industry. Here are some of the key takeaways:
- Do your homework.
- If you take advantage of people, you may be the one that suffers.
- Brand-agency relationships should be partnerships.
- Be prepared to deliver what you have sold.
- Be fair, but don't just give it away.
The more I write about this industry, the more insights I gain -- and the more I realize that the rules of industry are identical to the rules of human nature. So in the immortal words of Bill and Ted (from their excellent adventure, of course): "Be excellent to each other; and party on, dudes!"
Adam Broitman is a creative marketing strategist.