• by Ross Fadner , October 5, 2004

AQuantive-owned interactive media agency, AvenueA/Razorfish, Tuesday said it plans to silo its search marketing services by formulating a new agency, AvenueA/Razorfish Search, which will become a division of the Seattle-based company. AvenueA/Razorfish Search will combine the search capabilities of media buyer AvenueA with the management and analytics services of eonMedia, a small company that aQuantive purchased last December when it bought search technology provider GO TOAST.

Company executives noted--somewhat paradoxically--that creating a stand-alone search arm enables AvenueA/Razorfish to integrate search into clients' Web campaigns more effectively. "Search is evolving, and sophisticated marketers are increasingly demanding that search be better integrated into their overall digital marketing strategy," said Harrison Magun, former CEO of eonMedia, who will now assume the role of managing director of AvenueA/Razorfish Search.

AvenueA/Razorfish Vice President of Media Jeff Lanctot said the integrated approach differs from the industry's conventional silo approach to search engine marketing. "We're not managing search in a silo or managing a cobbled-together relationship between search and other campaigns," he said, adding that, by working together with other components of AvenueA/Razorfish, the new firm will be able to answer questions like 'How does my Yahoo! Front Page buy impact my search campaign?'. Lanctot said AvenueA/Razorfish Search will hold a seat in all client media planning discussions to ensure campaign integration wherever possible.

AvenueA/Razorfish's decision comes at a time when most marketers and agencies have been forced to outsource their search engine marketing services as a result of technical setbacks and client-side demands for accountable practices. "Although we have strong internal resources and analytics, the search space is a very complex and competitive medium," noted Monica Woo, chief marketing officer of 1-800-FLOWERS, an AvenueA/Razorfish Search client.

According to July 2004 JupiterResearch data, 62 percent of agencies look for outside help to manage and execute campaigns, while 35 percent hire permanent positions.

"The practice of outsourcing [search engine marketing] to SEM agencies has a shelf life," Lanctot proclaimed, adding that most major agencies such as these will be bought out by interactive shops or media companies in the near future. He said that agencies don't like having to outsource these services, while search engine marketing agencies want greater security in a market heading toward consolidation.

Lanctot noted that AvenueA/Razorfish has provided search services since the late 90s. Today, he says that no other company has spent as much in the last year as AvenueA/Razorfish has on search; the practice makes up an estimated 25 percent of the agency's annual billings.

Lanctot said that because AvenueA/Razorfish Search is so closely integrated with the rest of the agency, the company most likely will not work with other ad agencies as a neutral search engine marketing agency. It plans to provide full services to client-side marketing departments.

The company's parent, aQuantive, has been known to blur the lines between collaboration and competition; another of its units, AtlasDMT--an ad server and campaign management tools provider--provides services for AvenueA/Razorfish's competitors.

AvenueA/Razorfish Search will be led by Harrison Magun, formerly managing director of eonMedia, and will operate in AvenueA's Seattle offices. Rob Wilk, director of search marketing in the New York office, will continue search efforts on behalf of clients in the East region. AvenueA/Razorfish Search clients include JP Morgan Chase, Gateway, Danskin, Select Comfort, PeopleSoft, and 1-800-FLOWERS.

Lanctot and Magun will formally introduce the new division and its capabilities at the Shop.org conference in Anaheim, California on Thursday.