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How to choose an SEM agency

In the previous part of my digital survival guide for the recession, I highlighted some digital media options for marketers to consider during a downturn.

Due to the importance of search engine marketing (SEM) especially during a recession, I will dedicate the next part to providing tips on how to choose an SEM agency instead of a media/interactive or any other type of agency.

A few years ago, choosing an SEM agency for Southeast Asia or North Asia was not a problem. At that time, supply was lower than demand, not many big agencies had set up offices in this region yet, and search campaigns were handled by only a handful of smaller agencies.

However the task of choosing an agency to work with has become more and more difficult with new digital agencies opening offices in Singapore and traditional agencies setting up digital departments. What I am going to cover is rather unique in the sense that it is coming from working experience with blue chip clients across the region -- ASEAN, North Asia, and the whole of Asia Pacific for that matter. Most of these clients have their HQs in Singapore, Hong Kong or mainland China.
1. Staff turnover rate
This is a big issue at the moment both for the so-called "big" international agencies and direct clients in the region. SEM is so new in this part of the world that there are not many professional SEM specialists out there in the market. There are, however, a lot of self-proclaimed masters in SEM though.

Because of the lack of talented professionals, many agencies are forced to hire youngsters or people with a limited understanding of online marketing, let alone search. Search marketing is not like display media or any other online marketing formats. It requires speciality, technical knowledge and constant learning. Understanding SEM from the technical standpoint is one thing. Having the experience of working with big blue chip clients, and understanding different work processes and communication skills is another level all together. Many of these executives end up working long hours daily due to the amount of work required. However, the results are not always what they want to achieve because of limited experience with SEM.

Another important issue that irritates clients the most is changes made to the account management team, or point of contact. There are a couple of problems associated with the change of account manager:

  • If the handover process from the agency is not done properly, the new account manager does not have enough knowledge and understanding about the account or optimization process. Hence the performance of the account is directly affected.

  • Each big company has their own unique concept, business direction as well as work process. One can only learn about these through working with different departments within the client's company. New account managers often lack this level of understanding.

It may come as a surprise but the average length of stay for an account executive in the online industry is less than eight months in Australia and about one year or less in Singapore from my personal understanding. I often come across clients who complain that during a short period of six months, the account has changed hands three times and new account managers often have no idea what they are doing.

It's very easy for the director or business development manager to go into a meeting and promise wonderful things to the clients. However, at the end of the day, it's the quality of the operation team that differentiates one agency to the next. You can't have a good, solid agency that delivers on a client's objectives if people come and go all the time. It's as simple as that. So be sure to ask any agencies about their staff turnover rate before embarking on any digital marketing ventures, especially during tough economic times.

In my humble opinion, staff strength is the most important thing to evaluate when selecting a new agency. There are, of course, many other factors like:

2. Proficiency in both paid search (PPC) and search engine optimization (SEO)
According to Wiki, Search Engine Marketing "is a form of internet marketing that seeks to promote websites by increasing their visibility in search engine result pages (SERPs)". SEM includes pay-per-click (or paid search), SEO and paid inclusion (for the sake of simplicity we won't talk about paid inclusion for now). By this definition, any SEM strategy should include both PPC and SEO. So any well-rounded SEM agency should be proficient in both PPC and SEO, and be able to provide both services to their clients.

3. Being capable of using different technologies
In this context, we mean "tracking technology" or "bid management tools". PPC or SEO does not work without web analytics. There is no use trying to optimize a campaign without post click data. It's like closing your eyes and trying to drive from Jurong to Changi (for those in Singapore), or California to New York for the US.

We are no longer at the stage where the primary concerns are just impressions or clicks but rather post click data (user engagement, conversions, etc.). Luckily, many big companies now realize that. Hence they have global deals with technology providers like Omniture and DoubleClick to implement tracking for all the markets. However, the sad fact is not many agencies have offices in the region, nor are local based agencies proficient in all of these different technologies. As the result, they either don't use it or use to a very limited extent.

One can argue that because of the level of spend the client has at the moment, the agency can't put in too much effort like sending executives for training, or actively using these tools to optimize the campaign, etc. Personally, I believe that agencies should have a more long-term perspective and provide a good level of service. Otherwise, with poorly managed campaigns, clients will get frustrated and the industry will never grow to reach its full potential. On the other hand, clients can't expect agencies to work on water and sunshine as well!

The list above is by no means exhaustive but I think these are important for the SEM industry at this stage of development in the region.

4. Willingness to explore pay per performance models
What this simply means is that instead of a traditional fixed account management fee model, agencies are willing to reduce the fixed fee and add on to that performance bonus elements. If the campaign performance is successful, the agency can potentially be rewarded more handsomely compared to the fixed AM fee model. However, if the performance is sub par then the commission is proportionately less.

While this model promotes a win-win situation for both client and agency, there are many details that need to be ironed out like acquisition strategies, cost of sales, market share, etc.

Chandler Nguyen is a search engine marketing specialist at dgm Asia Pacific.

Chandler is a Digital Marketing Professional, specializing in pay per click (Google Adwords, Yahoo Search Marketing,Baidu Paid Search), Search Engine Optimization, landing page optimization  and web analytics. Chandler spent 7-8...

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to leave comments.

Commenter: Adam Viener

2009, March 30


Having an SEM agency take on a portion of the risk with a performance structure is ok, but there are also another brand of Performance SEM Agencies out there like imwave (http://www.imwave.com) that will actually work with their partners on a 100% performance model where they pay for all of the ad costs and only get if their clients make money from the campaign.