• by Sara Holoubek , February 6, 2006

Courting a marketer for search dollars requires fending off many suitors, including full-service agencies, technology players, or the engines themselves. Eventually the marketer commits, the union is celebrated, and the honeymoon begins. Press releases are issued, logos are posted to the Web site, and the couple starts working on a family of happy results. Life is good.

Cheating Hearts

While larger agencies tend to be faithful, SEMs often silently woo direct competitors, especially in the absence of exclusivity agreements. As the saying goes, if two players in the same space make competition, three make vertical expertise. But is this right? Some might say that if no one knows, it isn't really "cheating." Yet the minute one finds out about the other, the whole lot finds itself in an awkward polygamous relationship.

 Dana Todd, co-founder of SiteLab, believes in transparency. "We are very upfront with our [search] clients and have never had a negative reaction." She mentioned that when offering a full suite of services beyond search, exclusivity is in order. "As the agency of record, we are engaged and fully committed to [the client]."

So the real question is, as some SEMs evolve into full-service agencies (or are acquired by agencies), will they forgo the luxury of serving multiple brands in a competitive space?

What! You Want Me to Sign a Prenup?

Sarah Fay, president of Isobar US, and I discussed how exclusivity can restrict agency growth. For many, it is a financial decision. "How big is a client willing to be?" she asks. We agree that if a firm is only spending in the low six figures on search, it is clearly not buying exclusivity. If that same firm issues an RFP to the tune of $15 million, it is another story.

The expectations going into marriage are much higher than for a dating couple. The agency-client relationship intends to be a long term commitment, with some spanning decades. Vendor relationships, while they might also endure decades, must be renewed each year or so.

What's Best for the Children

For eFrontier, exclusivity is not in the best interest of a good SEM (emphasis on good) or the advertiser using a good SEM. Chris Zaharias, vice president of sales, stated that "the focus is to improve ROI via efficiencies, such as increased volume of revenues and/or margin. Provided we can consistently increase ROI, the advertiser should want us to work with their competitors. Why? Because competitors' inefficient search campaigns drive up CPC more than if the campaigns were efficient." While this might seem outrageous, the firm has empirical data in a major vertical to support the case.

Till Death Do Us Part?

Amy Auerbach, vice president/group account director of Media Contacts, suggested that SEMs that want to evolve as full service interactive shops will need to play by agency rules. This means managing competitive accounts out of separate offices or under separate operating units. Should an SEM be acquired, the rule also applies, unless one party resigns a particular account to avoid conflict of interest. Until then, all is fair in love and war.