I really enjoyed Gord Hotchkiss' series ofsummerstories -- or, as I like to call them, fireside chats -- and was quite moved by Kaila Colbin's column about her father's stoke. It's not often you get a glimpse into the lives behind the Search Insiders -- unless you make it out to the biannual Search Insider Summit -- so I thought I'd continue the trend with my "getting into search" story.
Long-time Fan, First Time Caller
Unlike Gord, my foray into search had nothing to do with Danny Sullivan. Although I'd been a follower of Danny's -- quite literally, in a Twitter sense -- for many years, I never actually met him in person until this past March. As for the context of that encounter, see my update to this post about Twitter monetization.
The year was 2003. I was running sales in the Midwest for MaxOnline, boasting one of the largest online ad networks after the acquisition of DoubleClick Media by L90. The MaxOnline model was one-part rep firm, one-part broker. Our value prop. was that we made it easy to extend your reach across the Web by leveraging our relationships with thousands of publishers and providers. You name it, we could aggregate it for you.
When I first started at L90, email list rental and banner ads were all the rage before spam and banner blindness sent response rates through the floor. Then it was co-reg, as marketers tried to build their own in-house lists. Next was pop-ups. Boy oh boy, did those things sell -- with click-rates upwards of 10% to 15% -- until consumers revolted and installed pop-up blockers .
Then one day I got a call from an agency asking if we could get them those textlinks on Overture. Apparently the process of building keyword lists and managing bids was too cumbersome for them. They were used to securing inventory in advance, knowing exactly what they were getting and seeing a weekly report on performance. So we created a search offering that essentially guaranteed a set number of clicks at a flat rate and promised to report back on traffic each week.
Basically, what we were doing was arbitrage. We took the flat CPC and pinched a few pennies off the top before using an intermediary to place bids on the search engines -- after, of course, they'd pinched a few pennies for themselves. It just so happened that the intermediary was a company started by some good friends of mine, called Resolution Media, but more on that later. Over the course of the next year, this search arbitrage program -- or, as we called it, MaxSearch -- quickly grew to represent some 75%+ of the millions in total revenue I was booking each quarter.
It was a true win-win proposition. Marketers and agencies were thrilled to work through me to get their ads on Google and Overture/Yahoo rather than have to worry about constantly monitoring bids and keywords. And ROI from the flat search CPC far surpassed anything else they were buying -- even after we pinched our pennies off the top. And, of course, for MaxOnline and Resolution Media, this was very high margin business, as our teams merely had to manage against effective CPCs -- it was as close to Ron Popeil's vision of "set it and forget it" as we've ever seen in search.
Along Came the Butler
Fast forward a year and, after Focus Interactive (fka Excite Network) bought MaxOnline in August of 2003 , Ask Jeeves bought Focus Interactive -- which had changed its name to Interactive Search Holdings. Got that?
Over the course of the next six months, it was business as usual while Barry and the Dillerettes sifted through the assets they had acquired. Sure enough, they looked at the millions of dollars I was brokering to Google and Yahoo and asked -- read: strongly suggested -- that I run those buys on Ask Jeeves. It made sense that they didn't want their own salespeople hawking ads for competitors -- but I told them bluntly that, even if I bought every single keyword on Ask Jeeves, I wouldn't be able to fulfill the orders I was writing -- there was simply not enough query volume.
As it were, we agreed that the amicable solution would be for me to depart the company and take this line of business with me.
It was September of 2004 when I joined Resolution Media as its eighth employee. At that time, the company had been operating for about a year and had picked up some decent clients in addition to the deals I was brokering through MaxSearch. My role was agency strategic partnerships and, overnight, we doubled our margins on the flat CPC campaigns as now there was only one party pinching pennies off the buys.
As it turned out, search arbitrage was a short-lived phenomenon. SEM became more and more popular -- to the tune of 40%+ of total digital media budgets -- and marketers and agencies realized they needed to build teams in-house to manage the channel. And, from a Resolution Media standpoint, it was difficult to fully optimize a campaign when we were held to strict CPC requirements with limited visibility into back-end performance.
For a while, we continued to run flat CPC campaigns as secondary traffic-drivers for marketers on top of their main paid search program, but the engines effectively killed that when they instituted rules to police affiliates. As a result, more and more of the new business we took on was under the framework of full-service SEM agency-of-record. In November of 2005, Omnicom bought Resolution Media and the rest, as they say, is history.
How Did You Get Into Search?
I hope you enjoyed reading my "getting into search" story as much as I enjoyed telling it. If you're curious about my life pre-pre-search, follow my in-progress Tweet-o-biography. Meanwhile, I look forward to hearing how the rest of my fellow columnists and all our faithful readers got into search. Share your story in the comments section and, looking at the upcoming Search Insider schedule... Matt -- tag, you're it, man!