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SearchTHIS: A Four Point Cautionary Tale

Kevin M. Ryan
SearchTHIS: A Four Point Cautionary Tale Kevin M. Ryan

I give up. I may have said this before, but this time I really have had it. I am sick of buying things that ultimately don’t work as marketed. Moreover, I am appalled by the barrage of advertising that promises the world via colorful characters and scenarios … only to meet pubescent automatons at retail outlets or similar toll-free “customer service representatives” who couldn’t give an ounce of pimple cream about my happiness.

As you might have imagined by the tone of my opening paragraph, the Ryan Thanksgiving holiday was unceremoniously interrupted by new technology once again failing me. At some point, I drank the wireless wondertool marketing Kool-Aid and sank about six hundred dollars into the latest and greatest do-everything phone. I then spent countless hours working to stay ahead of the learning curve, loading software and purchasing accessories. For my troubles, the maker and carrier of said gadget left me out in the cold when it crapped out.  

Luckily, in the absence of being able to talk to anyone I know, get on the Internet, or even check my SMS, I found a packet of processed wood fiber in a box near my computer that I thought I would share with you this week; an eMarketer White Paper, Top Ten Ways to Make Search Marketing Work For You. Just like my wireless experience, the paper contains key trouble zones in search that are certainly worth some Op-Ed discussion. 

My dream: A world in which things actually work

Ironically, I consider myself to be a lucky guy despite getting screwed over by just about every piece of technology. I somehow managed to bamboozle a beautiful intelligent woman into dating me; I live in a nice house, and seem to make enough taxable green to keep me in fun toys (that never seem to work). You know what they say, unlucky in consumer product satisfaction, lucky in love. Under the protection of said logic, I am guaranteed romantic bliss for eternity.

Speaking of bliss, search has enjoyed quite the run of most excellent joy. Unprecedented growth, its own industry organization(s), widespread acknowledgement, and even an official addition or two to popular language with "To Google" fueling search’s adoption into our daily marketing lives.

Or so it would seem. 

The “Top Ten” White Paper does an excellent job of laying the foundation for all the good things happening in search, but what I really liked about it was the introduction of some of the not-so-nice things in search. For example, the problems of imbalanced spending, high cost of clicks, potential consumer backlash of search being just a bit annoying and the possibility of search becoming so difficult that no one will want to use it anymore.

Battle for the money

While it would be fun to dissect every little foible that exists in search, I’d rather stick to the facts. Typical with eMarketer White Papers, this one identifies areas of interest that the rest of the world somehow missed. (I reach the same goal in suffering through the psycho-technical cleansing associated with spending time on toll-free tech support calls.)

eMarketer indicates that while industry research from the IAB has pointed to the overall growth of online advertising at over 20 percent from 2002 to 2003, simply removing the search portion of that figure delivers an actual spending drop of around 7 percent in online ad spending.

No one really talked about a loss because we (myself included) spent a great deal of time celebrating growth. I liken this to marketers of wireless and other consumer products regaling us with great commercial spots and selling us on great ideas, all while neglecting the more important aspects of creating dependable practical tools while supporting us when things go awry.

The eMarketer theory (read: summary of thought derived from collection of facts) is that while search spending fueled growth, we shouldn’t ignore the possibility of search pulling dollars away from other areas of online marketing. I’ve seen this happen more times than I can count. Note to marketers: Don’t sacrifice online ad budgets for search. There are plenty of other areas to hijack funds, but don’t even think about pulling back on that consumer helpline budget.

Search is getting too expensive

Like many things in life, warning signs start to appear before all heck breaks loose. Take my wireless convergence device for example; it didn’t simply blow up one morning. At first, it wouldn’t let me answer the occasional call. Later, the random call blocking became more frequent, then my email stopped downloading and my pictures disappeared. Finally, last week, it achieved total meltdown.

We may be starting to see a search disaster happening as well. eMarketer cited a Jupiter survey of June, 2003 in which 57 percent of respondents declared that many of their keywords had become too expensive for them and just over half were concerned they were paying too much for keywords. 

I didn’t want to believe that my phone was about to have a giant heart attack, but there wasn’t much I could do about it. Little things like click costs skyrocketing might just be the first in a series of search disasters. Luckily, search cost denial can be overcome with action.

We need both to continue educating advertisers about returns to slow, ego-driven keyword bidding and to encourage measurement -- in my experience, once marketers begin to really understand return requirements keyword costs will get under control fast.

Win the hearts and minds

By what zany logic is it appropriate to spend millions on advertising while systematically alienating the people you are trying to reach when things don’t work as planned? Wireless carriers tout features and benefits, while calls randomly drop and servers are often “currently unavailable.” Search marketers talk about the benefits of search, but sputter and grunt when the subject of whether or not people actually appreciate the redeeming qualities of listings arises.

Paid search proponents say sponsored listings are well accepted when relevant. Organic optimizers love to preach about the bulk of clicks coming from under the paid portion of the page without specifying a particular category, i.e. commerce or information search click sourcing.

Both arguments may have merit, but the third revelation from eMarketer suggests there may be a consumer backlash on paid listings coming our way. Citing a survey completed by Intelliseek -- an overwhelming 66 percent majority of surfers distrust search ads.

Distrust? Maybe I am in the minority here, but lately I am having difficulty believing in anything I see or hear bearing any resemblance to an advertisement. The real problem here is the search engine’s tendency to perch a paid listing in every corner of otherwise unused site real estate. In addition to the search result we see them in email, on news pages, and now, on our desktops.

The easy solution to a complex problem here lies in making sure that everywhere we see a search listing it doesn’t impede our intended activity and that search creates a better experience for users. 

We better be careful what we wish for

Somewhere along the line, it became OK to be disconnected from what we are promising in products and services. In the instance of the big companies that made and provide service for my phone, this appears to be the case. Similarly, if we let the quest for almighty search revenue be our guide, we might just miss out on helping serve our surfing constituency.

The last little gem in the White Paper is the suggestion that search might work itself out of the surfing equation. eMarketer points out that email was once thought the online darling, but we all know what happened to that when spammers took over. The White Paper cites a WebSideStory study in direct navigation that states that entering a URL or using a bookmark as opposed to using a search engine increased 15 percent from 2002 to 2003.

This makes sense: If one finds something one likes in searching paid, unpaid and “other” listings, a bookmark might be a good way to avoid having to conduct another search. Since many don’t trust search listings anyway, a user’s desire to avoid another laborious search is understandable. This reticence to keep searching is the same form of adoptive indifference we see with consumer technology that fails. History has taught us that consumer apathy is a powerful thing, hasn’t it?

Give people one or two reasons to bow out of a complicated activity and they'll take it. In this instance, a smart search engine might just maintain a focus on both relevancy and revenue while encouraging surfers through media outlets to see what’s new by continuously improving the search experience.

Sign me up for a room next to Martha Stewart

Like many of you, I returned to work for the three-week lull between Thanksgiving and [insert your favorite around the end of December holiday here], yesterday. Perhaps you are hastily trying to complete next year’s budgets, fill in the blanks on everything you didn’t quite get to this year or are coasting your way into 2005 in the odd chance you actually accomplished everything you wanted this year.

Whatever you might be up to in rounding out 2004, take a minute to think about where your efforts are taking you. Are you communicating with your customers or just feeding them marketing mumbo jumbo? Are you creating a better experience for them or are you just building short-term shareholder equity by pumping out new products as fast as you can? If you have a few moments after reflecting on those little gems, think about what you are doing to improve search marketing’s long-term viability.

What am I going to do with the latter part of my year? Since you asked, and since my human resources department is hell bent on making sure I take all my vacation days, I plan to split my time between protesting outside my wireless provider’s world headquarters and paying the lovely people who made my phone a visit with a few other complaints.  

While this might land me a six-month stay at a federally-run country club, I plan to accuse my vendor of -- among other things -- selling me this piece of junk phone and then refusing to stand behind it with a refund or immediate repair when, after six months, the product performed less than half of what it was supposed to be doing and then died completely.

Maybe then Martha and I can work on some black and white striped cell phone cozies.

iMedia Search Editor 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. Ryan believes in sound guidance, creative thought, accountable actions and collaborative execution as applied to search, or any form of marketing. His principled approach and staunch commitment to the industry have made him one of the most sought-after personalities in online marketing. Ryan volunteers his time with the Interactive Advertising Bureau, Search Engine Marketing Professional Organization, and several regional non-profit organizations. In his off time, Ryan enjoys serving as Vice President at Wahlstrom Interactive.

Meet Ryan at the iMedia Agency Summit, December 5-8 and Search Engine Strategies, December 13-16.

The bad
While there are a lot of workable facets to a successful compensation model, there are also some ideas that -- while still in widespread use -- tend to be frowned upon because they are often too lopsided.

According to Jeff Berkwits, a former marketing manager at Upper Deck, one often onerous compensation model that always sounds his alarm bell is the commission on media approach.

"One approach that I generally avoid is percent of media, as it encourages an agency to 'spend big' regardless of whether it's appropriate for my needs," Berkwits says.

To that end, any compensation agreement that allows -- or encourages -- an agency to run up the score simply isn't going to work for long. But by the same token, many agencies pointed out that partnerships with a disproportionate amount of risk on the agency weren't feasible either.

The contradictory
"I feel that the fee-for-services model is equal opportunity in that it disadvantages clients just as often as it disadvantages agencies," Wohlwerth says. "Sometimes, clients don't receive all the services they paid for. Sometimes clients have substantial scope creep and agencies do a lot more work than what they got paid for. The fee-for-services model is fundamentally flawed because it is based on 'selling' the agency's costs rather than the outcome of its work. This system does not differentiate between good and bad work. When you're working against the clock, it is in your best interest to eat up a lot of time. It's madness. Lastly, agencies do not do a good of job tracking time, so I am suspicious of their self-reported time -- another reason to abandon this system."

Wohlwerth isn't alone in this. Brunner, who says that fee-for-service can work under the right circumstances, admits that it's really his compensation model of last resort.

"The least preferable option for me is [hourly work]," Brunner says. "Being paid by the hour has zero relevance on the outcome of the services provided. Further, the hourly method does not promote efficiency or effectiveness; it rewards an agency for taking more time, not less, to accomplish the work. It also places equal emphasis on an hour of time regardless how the time was spent."

And where does a brand come down on this?

While Berkwits concedes that there are pros and cons to the fee-for-service model, he says he's not willing to abandon it altogether. In fact, Berkwits says that depending on what the brand needs, fee-for-service can be the best way to keep an eye on costs, especially if the project is a larger, one-shot assignment. But he adds, he's always been open to discussing performance-based models. And for Berkwits' money, it's always going to come down to adjusting on the fly.

"There's no right or wrong compensation model: the best approach really depends upon my needs for a particular project," he says.

Money isn't everything
While we've dedicated a good deal of space to compensation, it's important to keep some perspective on the matter. That is, while money is at the heart of the transaction, it's seldom the determining factor in a brand's decision to hire a particular agency, or at least it shouldn't be, Wohlwerth says.

"It's generally not compensation that causes agencies to lose pitches," Wohlwerth explains. "We seek to neutralize compensation before the finals by getting the agencies to submit costs in advance. That way, agencies are being selected on their own merits -- not their cost. While fees are clearly important, a client that selects an agency solely on price deserves what they get."

But when it comes to price, it pays for an agency to be creative and flexible above all else. While Berkwits says he understands that it's often hard to bend on the money issue, he points out that agencies that can't, or won't, step into the brand's shoes will surely lose the client.

"Very often I have had agencies express to me how we're partners in whatever project we're undertaking, yet when it comes time to discuss compensation, they're inflexible," Berkwits says. "I understand that both parties need to profit, but starting off extremely rigid sends a signal that's often at odds with the collaborative sentiments otherwise being expressed. If they can't at least think creatively about compensation, then I begin to suspect they may not be able to think as creatively as I might like about my brand."

Michael Estrin is a freelance writer.

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