• by Kate Kaye , July 11, 2004

Yahoo!'s revenue numbers are soaring. Google's imminent initial public offering has excited people for months. Nowadays, praise abounds for these and other search engine firms. But ask search engine marketers about them, or prowl search industry Web forums, and terms like "Distrust" and "Mutiny" crop up-hardly words typically used to describe a symbiotic relationship.

As the search segment has matured and grown more complex, search engine companies have introduced increasingly robust services for advertisers. They have also put more efforts towards approaching advertisers directly through internal sales forces, rather than relying on Search Engine Marketing and Optimization firms (SEMs) alone to bolster their businesses. Some SEMs appreciate the additional tools and general outreach conducted on the part of search engine firms like Google and Yahoo!'s Overture. Others, however, are threatened by what they see as a creeping infringement on their services and direct sales territory.

"Some on the search engine side would like to cut out that middle man," observes Danny Sullivan, editor of search engine resource site Search Engine Watch. He explains that the perception among some SEMs is "See-they're trying to cut us out!" Still, he suggests, "It's probably more paranoia than reality."

Google is currently testing its new AdWords Automator tool, which automatically generates keywords and ads that link to specific Web pages chosen by advertisers. The search engine goliath also launched a new service in May available to new AdWords advertisers only. Through its Jumpstart program, "specialists" provide search novices with ad writing services, choose relevant keywords and help set cost-per-click amounts. A Google spokesman declined to comment for this story.

In addition to holding regional training seminars for smaller advertisers, Overture's Advertiser Center offers tips, tutorials and tools that gauge online campaign effectiveness and measure conversion rates.

Many point to a potential conflict of interest that could result from search engine companies consulting advertisers, especially for campaigns involving keyword bids across multiple search engines. "We don't want to share performance data that shows the price of inventory with a publisher," says Peter Hershberg, managing partner at SEM company Reprise Media. "They might set bidding in such a way to put a squeeze on us."

Overture's sales operation has been called into question by some SEM execs including Misty Locke, President and Co-founder of SEM firm, Range Online Media. She contends that Overture's direct sales teams sometimes compete with SEMs for advertiser business, which "causes inconsistency in our industry and distrust." Locke adds her company is "very excited for Yahoo! to get some competition from MSN."

One SEM representative who spoke with MediaDailyNews off-the-record portrayed a typical search trade show powwow during which the consensus among SEMs is "Let's pull a mutiny on Yahoo!."

Sometimes serving customers requires relationships with both the SEM and advertiser itself, stresses Dan Boberg, Overture's Director of Strategic Alliances. "We do not sell against the [SEM], but look to complement the work they are doing." Asserts Boberg, "We really see [SEMs] as partners." He alludes to Overture's three-year-old Ambassador Program through which dedicated account managers prioritize the needs of SEMs, and more recently, traditional ad agencies.

Tension among search engines and SEMs will always exist, argues Denise Garcia, Media Research Director at GartnerG2. "Search has always been like that. Look at how Google powers other search engines. ... They're basically 'co-opetition.' "

Google is also developing a client services initiative through which sales reps will work directly with SEMs, according to Barbara Coll, President and Chair of the Board for search industry trade group, Search Engine Marketing Professional Organization (SEMPO). While she admits some SEMPO members are concerned about search engines horning in on their business, she believes, "Obviously [search engines] want to work with SEM companies... because we sell their product beautifully; we're like an extension of their sales force."

Fredrick Marckini, CEO of SEM firm, iProspect doesn't deny the existence of channel conflict. However, he concludes, "The fact that the major search engines have demonstrated a willingness to pursue direct relationships with the big brands is a much greater threat to the big agencies than to search-centric firms with hands-on experience to advise, and the capability to move, evolve and flex to meet new market challenges."