• by Ross Fadner , December 7, 2004

Search marketing firms have become the official shepherds of paid search, with 51 percent of search spending now overseen by search engine marketing firms, according to new findings from JupiterResearch. But just 31 percent of search marketers report using an agency to manage their search campaigns--indicating that, as in the offline world, the majority of spending dollars belong to large, deep-pocketed companies.

Nate Elliott, report author and JupiterResearch associate analyst, said the trend toward agency adoption indicates that the search market is maturing. "Search is a classic data-driven, self-service industry," he said, adding that it's "slowly maturing into a regular advertising industry."

The Jupiter report reviews and rates 14 top search engine marketing agencies both for paid listings and organic search optimization. The reviews cover three categories: agency size, overall aptitude for search engine marketing services, and the overall quality of proprietary management tools and services. Above all, Elliott said, client satisfaction was the most significant factor.

The report named Decide Interactive/24/7 Search, Did-It.com, Impaqt, DoubleClick unit Performics, and aQuantive's AvenueA/Razorfish Search as the top-rated paid listings vendors; iProspect and Impaqt were named the top-rated vendors in organic optimization.

Elliott said the key differentiator for top-rated search engine marketing firms in paid search is technology ownership.

With organic optimization, Elliott said that agencies were judged based on how well they used available technology to boost clients' natural results performance across several search engines.

Richard Hagerty, CEO of Impaqt--the only agency to receive a top rating for both paid listings management and organic optimization--said search engine marketing firms should take a technology approach rather than a "human" approach to natural optimization, because an agency with several accounts and/or large clients needs to manage against individual engine rankings on a wide variety of keywords. Also, he pointed out that ranking is subject to change whenever the engines tweak their algorithms, which makes a "human"-based approach to management significantly more difficult than a technology approach. "Organic search is very fluid," he said.

Hagerty also said that Impaqt was able to perform well in both categories because it uses the same technology both for paid listings management and natural optimization management. He added that transparency is key to establishing good relations with clients. Even if they don't entirely understand the processes (and many clients--particularly large brands--don't), Hagerty said it's important for clients to see that the agency is allocating resources to the client's cause at all times.